Legal & Tax Protection 2026

Do Solar Panels Increase Property Taxes in NJ? (N.J.S.A. 54:4-3.113)

Updated Feb 15, 2026 | Sunshine Solar Energy

In 2026, New Jersey homeowners are facing some of the highest property tax rates in history. It is the #1 question we hear: “If I add solar panels and increase my home value, will my taxes go up?”

The answer is a definitive NO. In fact, New Jersey has one of the strongest “tax shields” in the nation for solar homeowners.

The Law: N.J.S.A. 54:4-3.113

Under New Jersey Revised Statutes Section 54:4-3.113, property that has been certified as a “Renewable Energy System” is 100% exempt from local property taxation. This means your local tax assessor is legally prohibited from increasing your assessment based on the value of your solar array or solar battery backup.

Whether your system adds $20,000 or $50,000 in equity to your home, that value is “invisible” to the tax man. You get the benefit of the equity without the burden of the tax.

A Note on the 2026 Federal Tax Credit

It is important to note that as of January 1, 2026, the traditional 30% Federal Residential Solar Tax Credit (Section 25D) has expired for homeowners who purchase systems via cash or loan. However, the NJ Property Tax Exemption remains fully active.

Because the upfront tax credit has shifted, most NJ homeowners in 2026 are choosing Power Purchase Agreements (PPAs). In a PPA, the provider (who still qualifies for federal incentives) passes those savings to you through a lower monthly bill, while you still enjoy the full 100% property tax exemption on your home.

How to File “Form CRES”

To secure your tax-free status, you must file the Application for Certification of Renewable Energy System (Form CRES) with your local tax assessor. This form proves your system is certified by the local enforcing agency and locks in your protection.

• Certification: Your system must be certified as eligible by the municipal construction office.
• Assessor Filing: You file the form with the assessor in the municipality where the property is located.
• Maintenance: Once approved, the exemption remains active as long as the system is operational.

Summary: The Only “Tax-Free” Home Upgrade

Almost any other home improvement—a pool, a finished basement, or a kitchen remodel—will eventually lead to a higher tax bill. Solar is the only major upgrade in New Jersey that increases your wealth while being legally protected from taxation.