After you get past the mechanics of how solar works, you should come to realize that “going solar” is more like making a financial investment than doing a capital improvement on your home. Aside from the great environmental benefits of solar, most homeowners are focused on saving money by installing solar — or, more importantly making money by installing solar panels.

Typically, homeowners that purchase their solar system will need to add the system to the home owners policy. Most solar systems generally adds only $20-$30/year in insurance premium.

No, in October of 2008, New Jersey enacted legislation exempting renewable energy systems used to meet on-site electricity, heating, cooling, or general energy needs from local property taxes. Please see Property Tax Exemption for Renewable Energy Systems for more information.

Yes, according to a report produced by the National Renewable Energy Laboratory entitled “A New Market Paradigm for Zero-Energy Homes: December 2006 The Comparative San Diego Case Study”, Solar panels can increase the value of your home.
“The greatest single gain in value was $446,410 for a home in the Shea Homes communities with a PV system owned for 26.9 months (a 79% increase in value). In comparison, the single largest gain for a home in the comparison community was $378,769 for a home owned for 40.2 months (a 61% increase).”
When you lease your system, things are going to be different. “Fannie Mae, B2-3-04: Special Property Eligibility Considerations (12/16/2014)”, indicates that: If the solar panels are leased from or owned by a third party under a power purchase agreement or other similar arrangement, the following are some of the requirements that apply: The solar panels may not be included in the appraised value of the property. The lease payment must be included in the debt-to-income (DTI) ratio calculation. This requirement does not apply in the case of a power purchase agreement if the payment goes entirely to pay for the energy. Any portion of the payment that does not go toward the purchase of the energy must be included in the DTI ratio.

There are currently two solar incentives available to homeowners in New Jersey and Pennsylvania. The first solar incentive is the investment tax credit (ITC), which currently allows you to deduct 30 percent of the cost of your solar energy system from your taxes. The second incentive is the Solar renewable Energy Certificate (SREC) program, followed by sales tax exemption and property tax exemption.

Solar renewable energy certificates or SRECs show that a certain amount of electricity was produced using solar energy. They are typically used in conjunction with New Jersey’s and Pennsylvania’s renewable energy standards (also called renewable portfolio standards or RPS) to show that regulated entities are meeting their solar energy goals.
In New Jersey’s and Pennsylvania’s RPS rules, an SREC is issued once a solar facility has generated 1,000 kWh (1MWh) through actual metered production. The SREC represents all the clean energy benefits of electricity generated from a solar electric system. SRECs can be sold or traded separately from the power, thus providing solar system owners a source of revenue to help offset the cost of the solar panel installation.

We are not in a position to provide tax advice and we always recommend that clients should consult their tax advisors when it comes to making tax related decisions, but you can click here to see some information provided by a New Jersey CPA along with the supporting IRS documenting the following “You can exclude from gross income any subsidy provided, either directly or indirectly, by public utilities for the purchase or installation of an energy conservation measure for a dwelling unit.”