Ask who receives the SREC-II payments
The Administratively Determined Incentive pays on generation. One SREC-II is created when a solar system generates 1,000 kilowatt hours of electricity, and the incentive is guaranteed for a term of 15 years, the project's Qualification Life.
Under a lease or a power purchase agreement you do not own the system. A third-party owner does, and who receives the incentive income over those fifteen years is set by the agreement. That is not a small detail in New Jersey, because the incentive is a substantial part of what a system is worth here.
So ask the provider directly, in writing: who is registered as the owner of the incentive, who receives the payments, and how is that reflected in the rate I am offered. A provider who keeps the incentive may still be offering you a good deal, but you should be pricing it knowing that.
Ask the same about Section 48E. It survives at 30 percent and is available to third-party owners under leases and power purchase agreements, so ask what the provider claims and what of that value actually reaches you. Confirm the answer with a tax advisor rather than with the sales material.
What changed for someone buying outright
The 30 percent federal Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025. A cash or loan purchase made now receives no federal credit, and a quote that still applies it is overstating your return substantially.
That has shifted the relative position of the options, and you should expect lease and power purchase agreement providers to lead with the fact that they can still claim a credit. They are not wrong about that. The question remains how much of it reaches you.
What has not changed is everything New Jersey itself offers. Full retail net metering, the fifteen-year incentive on generation, the sales tax exemption via Form ST-4 and the property tax exemption via Form CRES all still apply, and they are a substantial part of why the state pays back as quickly as it does.
Ask any installer to rebuild the arithmetic from what actually exists now rather than adjusting an older model. If a salesperson resists producing that version, the resistance is itself informative.
Comparing a lease against buying
These are different products, and comparing them on a monthly payment alone is how people end up unhappy. Ask for the total cost over the full term of each, any escalation rate if the payment rises over time, what maintenance is included, and what happens at the end of the agreement.
Ask what happens when you sell the house. Under a lease or power purchase agreement a buyer generally has to qualify for and assume the agreement, or you buy it out, so ask what a transfer involves, what a buyer must qualify for, and what a buyout would cost. Ask before you sign rather than when you list.
If you buy outright you own the system and it is simply part of the house, along with the incentive registration and both exemptions. If you finance with a loan you own it on the same terms, with the debt as a separate obligation that generally has to be settled at closing.
Whichever structure you choose, ask for the bill savings and the incentive income to be shown separately in the projection. They last for different periods and behave differently, and a single combined figure conceals which part of the return you are actually buying.
Two exemptions, and neither one happens by itself
New Jersey exempts solar energy equipment from state sales tax, but the exemption has a procedure and it happens at purchase. Under N.J.A.C. 18:24-26.4 the purchaser must issue to the seller an Exempt Use Certificate, Form ST-4, or other approved form, indicating on its face that the purchase qualifies for exemption as a solar energy system, with the installation property address inserted.
Ask your installer how that is handled and confirm the certificate was issued rather than assuming the price you were quoted already reflects it. It goes to the seller as part of the transaction, not to the state on a return later.
The property tax exemption is separate. Qualifying renewable energy systems are exempt from real property taxation under N.J.S.A. 54:4-3.113a to g, but Form CRES, the Certification of Renewable Energy System, must be filed with your local municipal tax assessor, and the system must be certified by the local construction code official.
The annual exemption is the difference between the total assessed value of the property before and after the system has been installed. Nobody files Form CRES for you by default, so ask whether your installer assists and put it on your own list either way. Requirements vary between municipalities, so a short call to your own assessor asking what they need is worth more than any general guidance.