Property Tax Exemption for Renewable Energy Systems
Administered by New Jersey Department of the Treasury
Adding solar panels, a small wind turbine, geothermal heat pump, or solar hot water system to your New Jersey home won't raise your property tax bill, because the system's value is exempted from local property taxes. To claim it, apply to your local assessor for a certificate using the Division of Taxation's Application for Certification of Renewable Energy Systems. The exemption starts the year after the certificate is granted, and your assessor can answer questions.
You can tell New Jersey residential, commercial, and industrial customers that qualifying renewable systems installed on their buildings will not increase their local property taxes, which strengthens the project's economics. Customers must apply to their local assessor for a certificate, and the exemption takes effect the year after certification, so help them file the state application early. Systems are judged against the Uniform Construction Code, meaning installation must follow manufacturer instructions, and biomass, hydroelectric, and resource recovery projects must also meet NJ DEP environmental standards.
Enacted in October 2008, this exemption removes the added value of on-site renewable energy systems from local property tax assessments; New Jersey has no state property tax component, and no program funding is involved since it is a forgone-tax incentive. Local assessors issue certificates that reduce assessed value to what it would be without the system, using an application developed by the Division of Taxation, which writes the implementing rules. The BPU and DCA share technical qualification roles, and DCA has determined the Uniform Construction Code is sufficient, so detailed technical standards are not expected; it covers residential, commercial, industrial, and mixed-use properties.
Program details
- Program ID
- 3100
- Effective
- 10/1/2008
- Last updated
- 3/14/2025
Eligibility
- Sectors
- commercial industrial residential
- Technologies
- solar water heat solar space heat geothermal electric solar thermal process heat solar photovoltaics wind (all) biomass hydroelectric geothermal heat pumps fuel cells using non-renewable fuels landfill gas tidal wave wind (small) geothermal direct-use fuel cells using renewable fuels
Program summary
In October 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. (There is not a state component to property taxes in New Jersey). Eligible renewable energy systems* include solar PV, wind, fuel cells, sustainable biomass, geothermal electric, landfill gas, hydroelectric, resource recovery, wave, and tidal systems that produce electricity. Systems that produce energy from solar thermal energy (e.g., solar hot water) or geothermal energy (e.g., geothermal heat pumps) are also eligible for the exemption. The exemption may be claimed for all qualified systems installed on residential, commercial, industrial, or mixed use buildings as accessory uses.
In order to claim the exemption, property owners must apply for a certificate from their local assessor which will reduce the assessed value of their property to what it would be without the renewable energy system. Exemptions will take effect for the year after a certification is granted. The New Jersey Department of Treasury, Division of Taxation is required to develop the rules and regulations necessary to implement this law. According to the law, rules relating to the technical qualifications for eligible renewable energy systems will be developed by the New Jersey Board of Public Utilities (BPU) and the Commissioner of Community Affairs. The Department of Community Affairs (DCA) has determined that the existing Uniform Construction Code, which requires compliance with a manufacturer's instructions in cases not specifically covered by the code, is a sufficient basis for determining whether or not a system qualifies for the exemption. Thus, as of this writing detailed technical standards are not expected.
The New Jersey Division of Taxation has developed an Application for Certification of Renewable Energy Systems. Prospective applicants should direct questions about the law to their local assessor.
*Biomass, hydroelectric, and resource recovery facilities must meet environmental standards as defined by the New Jersey Department of Environmental Protection and minimize environmental and community impacts.
Contact & resources
- Contact email
- nj.taxation@treas.state.nj.us
Please verify current program details with the administering agency before making any financial decisions.
