Rising electricity rates make solar an attractive alternative for New Jersey consumers trying to lower energy costs.
New Jersey is a leading solar state with more than 4 gigawatts of total installed solar photovoltaic capacity. The Solar Energy Industries Association ranks New Jersey eighth in the nation for total installed PV capacity. Nearly 7% of the state’s electricity comes from solar generation, which will increase in the coming years.
According to CNET’s sister publication SaveOnEnergy, the Garden State ranks 12th in consumer electricity costs in the country. The average October residential electric bill in New Jersey was $112.81, or $1,353.72 per year. New Jersey’s Board of Public Utilities unanimously adopted electricity rate hikes in September 2022 due to high fuel prices.
Going solar is more feasible and affordable for many Americans than just a decade ago. According to a National Renewable Energy Laboratory report, the cost of residential solar panels has dropped by 64% since 2010. Federal, state and local rebates can significantly cut the initial cost of solar panels. Solar panels help you save on electric bills, cut household carbon emissions and boost your home’s value.
New Jersey solar panel costs
The cost of a residential solar system will depend on the number and types of panels used, component options, installation fees and local permitting costs. The price differs between states due to varying local quotes, system sizes and incentives. Here’s a breakdown of New Jersey solar panel costs based on 2022 data from consulting firm Wood Mackenzie and 2023 data from Findenergy.com.
New Jersey vs. the US
| System size (kW) | Price per watt | Total cost | |
|---|---|---|---|
| New Jersey | 6 | $3.76 | $22,543 |
| US | 8 | $2.99 | $23,920 |
How to pay for solar panels in New Jersey
As with any major purchase, you will want to think about how to finance the cost of solar panels. Keep in mind, the money from the tax credit won’t be yours until after you’ve filed your taxes for the year the panels are installed. It’s also important to factor in the solar payback period, which is the time it takes to recoup your upfront investment and when savings begins.
Here are some ways to pay for solar panels:
Solar loan: Your solar installer likely has a relationship with a bank or other financial institution to offer a loan designed for solar panels. This can be a great deal, but you’ll want to get multiple offers to ensure the rates and terms are the best.
Lease or power purchase agreement: Some solar companies allow you to lease your system or enter a power purchase agreement. If you choose to lease, you won’t own the solar system, you’ll just pay for use of the equipment. Entering a power purchase agreement means you’ll buy solar energy generated from the solar company to power your home. The price you’ll pay is usually lower than the retail rate from your local utility company. Note that not all incentives are available with a lease or power purchase agreement.
Personal loan: You can also borrow the money through a personal loan. The main difference between a personal loan and a home equity loan is that a personal loan is typically unsecured. That means your house isn’t at risk. The downside is they tend to have shorter terms and higher interest rates than home equity products.
Cash: This approach only works if you happen to have thousands of dollars sitting around in a bank account. If you don’t have that yet, but you want solar panels in the future, consider saving money in a high-yield savings account. Interest rates are high right now, and this can help you save faster.
Home equity:
You don’t have to use a loan from your solar company. Financial institutions offer home equity loans and lines of credit (or HELOCs) that are commonly used for home improvement projects. These loans can be used for basically any purpose, and they may be a good fit for your solar project. Shop around and make sure you’re getting the best deal.
New Jersey solar panel incentives and rebates
Despite a significant decrease in costs in residential solar, panels still cost thousands of dollars. You can reduce the price further with federal tax credits and other incentives specific to New Jersey.
The federal Residential Clean Energy Credit (formerly known as the Investment Tax Credit) allows you to deduct 30% of the cost of a solar system from your federal tax returns after you purchase solar panels. The federal credit alone could cut more than $8,600 from the cost of the average solar system installed in New Jersey. Most solar batteries are also eligible for the federal tax credit if paired with solar panels.
The Inflation Reduction Act, a major federal climate bill enacted in August 2022, increased and extended the solar tax credit until 2034. The credit will drop to 26% in 2033 and 22% in 2034. You can complete and submit form 5695 (PDF) to the IRS to receive the Clean Energy Credit. Follow the IRS instructions on how to complete this form. After the IRS approves your paperwork, you will get your solar savings in a credit when you file your federal tax return for the year.
New Jersey also provides several residential incentives to lower the cost of solar. While you can find a complete list of incentives in the Garden State on the Database of State Incentives for Renewables and Efficiency, here are the major ones worth noting.
| Program | Description |
|---|---|
| Net Metering | Net metering law in New Jersey mandates that utilities in the state offer net-metering rates to residential, commercial and industrial customers. Solar system owners can sell excess generation back to the grid at retail. |
| Solar Panel System Sales Tax Exemption | Solar owners in New Jersey can receive a full exemption from the state’s sales tax for all solar energy equipment. All taxpayers in the state are eligible for the exemption. |
| Successor Solar Incentive Program | The SuSI program replaces New Jersey’s Solar Renewable Energy Credit program. SREC is a tradeable certificate representing the positive environmental impact of your solar system. Under the SuSI program, you can receive one SREC for each megawatt-hour your solar system produces. Residential solar systems of all sizes receive a fixed $90 in SRECs for 15 years. |
New Jersey solar panel companies
According to the SEIA, 370 solar companies are operating in New Jersey. It can be hard to narrow down the options from so many choices. Here is a list of some of the top solar installers in New Jersey.
Green Power Energy
Since 2009, Green Power Energy has installed more than 130,000 residential solar systems in New Jersey. The company also installs battery storage systems and residential electric vehicle chargers. Green Power Energy offers a generous 25-year limited warranty for the quality of work, and most of its equipment has 25-year product and performance warranties. The company provides solar financing and leasing options to customers who can’t pay cash for a solar system.
Momentum Solar
Momentum Solar is one of the fastest-growing solar companies and is based in New Jersey, with services in 10 other states. The company uses in-house professionals who manage the sale, design, permitting, installation and interconnection of solar systems for residential and commercial customers. Momentum Solar also installs battery storage systems, which are currently limited to five states, including New Jersey. The company provides a 25-year quality-of-work warranty and a 25-year product warranty. Momentum Solar customers can buy outright, finance their solar panels, or enter a lease agreement or a PPA.
New Jersey Solar Power
Founded in 2003, New Jersey Solar Power is one of the longstanding solar installers in the state. The company’s services include the installation of solar panels, solar batteries and EV chargers, real-time remote monitoring, financing, solar repair and maintenance. New Jersey Solar Power partners with large solar manufacturers like Enphase Energy, SolarEdge Technologies, Tesla, Q Cells and Generac. The company offers a 25-year quality-of-work warranty and 25-year product and performance warranties on all its solar equipment offerings. It doesn’t provide solar leases and PPAs.
Palmetto Solar
Palmetto Solar is one of the country’s largest solar panel and battery installers. Palmetto has built a strong customer support service since its founding in 2010. The company answers all your solar questions through phone, 24/7 online chat, and email options. It also offers post-sale support, like an optional Palmetto Peace of Mind Plan, which includes monitoring your solar system and discounts on maintenance, repairs, and solar panel cleaning. It promises a 25-year quality-of-work warranty, a 25-year performance warranty and a 12-year product warranty. If you can’t buy a solar system with cash, Palmetto provides solar loan, leasing and PPA options for its residential customers.
SunPower
Founded in 1985, SunPower is one of the top solar companies in the world. As one of the leading solar panel manufacturers, SunPower Maxeon solar panels have the highest efficiency level commercially available of nearly 23%. The company also provides solar installation services through an extensive network of certified installers in the US who handle the entire customer lifecycle, including design, permitting, installation, interconnection and maintenance. SunPower offers a 25-year Complete Confidence product warranty, a 25-year performance warranty and a 25-year warranty for the quality of work. SunPower provides solar financing, leasing and PPA options for its customers. In 2021, SunPower created an in-house financing institution called SunPower Financial, which offers attractive solar loans for underserved communities.
Installation factors to keep in mind
Going solar isn’t cheap. It’s worth considering all the factors when deciding your home’s solar viability, including:
- Your roof’s condition and pitch: Your roof should be in good condition before you install solar panels. Putting up a new solar system on an older roof could cost you more in the long run because you will need to remove the panels and wiring if you need to replace or repair the roof. A roofing expert will examine your roof’s condition before solar installation. Also, theroof’s pitch will affect your solar panels’ productivity. The Department of Energy determined that solar panels operate most efficiently with an angle between 15 and 40 degrees.
- HOA and neighborhood rules: New Jersey bans homeowners associations from blocking solar panel installations for their members. The state’s Solar Easements Act gives residents the right to negotiate solar easements with neighbors to receive optimal exposure to sunlight for their solar systems.
- Insurance coverage: It’s a good idea to include your solar panels in your homeowner’s insurance policy. Most homeowner’s policies cover rooftop solar panels, but you’ll need to check with your insurance company for the specific details of your policy.
- Climate: New Jersey gets plenty of snow in the winter. While solar generation in the winter is less than in the summer due to shorter days, your solar panels will convert sunlight photons into electricity as long as the sun reaches the surface of the panels. Solar panels also can reach top efficiency levels in cold weather because their optimal internal temperature is between 40 and 55 degrees Fahrenheit. While heavy snow may temporarily decrease solar generation, solar panels are typically installed at an angle to allow snow to slide off and resume generation.
- Cost and time: Going solar is a significant investment for most people. But before you commit to a solar loan, lease, or PPA, you should consider how long you plan to live in your house. You won’t reap the long-term cost savings from solar generation if you have to move in a few years. Yet solar panels can be the right choice if you plan to remain in your home for a long time. The average payback period for solar panels is between six and nine years, but it varies from state to state.
New Jersey solar power FAQs
How did New Jersey become a top solar producer in the US?
New Jersey’s Clean Energy Program is a big reason. Established in 2001, it incorporates robust solar energy growth elements, like an annual incremental increase of solar generation in the state’s Renewable Portfolio Standards and the development of the SREC program. Additionally, it includes net metering standards to incentivize residential solar investments. These measures created a robust solar market where investors get compensation for generating clean and renewable energy.
What are Renewable Portfolio Standards?
Renewable Portfolio Standards, or RPS, are state mandates requiring that utilities generate a certain percentage of electricity from renewable sources. The RPS aims to increase the share of renewables in electricity generation and diversify energy sources. One of 31 states with RPS goals, New Jersey has the most ambitious RPS in the US. It requires 35% of energy sales to come from qualified renewable resources by 2025 and 50% by 2030. New Jersey’s RPS should expand clean energy technologies in the state and provide economic and environmental benefits.
You can sell your SRECs to electric suppliers and providers seeking to meet their state RPS requirements. Because SREC is an electronic certificate specifying name, location, fuel type, SREC quantity and SREC price, you can sell it through the GATS Bulletin Board (free to use) or through a broker or aggregator (fees apply) like Sol Systems.
What happens to my SRECs if I sell my house?
If you sell your home, you can transfer the ownership of your solar system and SRECs to a new owner. You and the new owner must download and complete paperwork through PJM-EIS Generation Attribution Tracking System to transfer the title for the solar system and SRECs.
