Property Tax Exemption for Renewable Energy Systems

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Eligibility: 
Commercial
Industrial
Residential
Savings Category: 
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 Info
Sector Name: 
State
Administrator: 
New Jersey Department of the Treasury
State: 
New Jersey
Program Type: 
Property Tax Incentive
Rebate Amount: 

100% of value added by renewable system

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.