Incentives

The main component of a working solar panel is the silicon wafers that turn sunlight into usable electricity. The process of creating blemish free silicon wafers is a complicated and expensive endeavor. In order to make solar power more affordable to the public, the local and federal governments have set up incentive programs to help relieve the cost of installation.

The federal government provides a 30% tax credit for the customer off the installation cost. When the customer pays their taxes, they receive a credit equal to 30% of the total cost of installation.

State incentives typically include production-based incentives, rebate-based incentives, or both. Production-based incentives are based on the amount of energy produced by the solar array. For every 1000 kWh produced, the customer receives a Solar Renewable Energy Credit (SREC). In New Jersey SRECs are typically worth around $500.

Rebate based incentives are awarded on a dollar per watt basis. If a state offers to reimburse the customer $1.00 for every watt installed, the rebate for a 7 kW system would be $7,000.