Solar in New Jersey: incentives, costs and payback (2025)

New Jersey is a leading solar state with excellent policies, strong incentives, and favourable economics that make solar an attractive investment despite moderate solar irradiance.

New Jersey solar incentives

Federal tax credit (30%) The federal solar Investment Tax Credit (ITC) allows you to deduct 30% of your solar installation cost from your federal taxes. This credit is available through 2032.

Solar Renewable Energy Certificates (SRECs) New Jersey's SREC programme allows you to sell certificates for the solar energy you produce:

• Earn 1 SREC for every 1,000 kWh generated
• SRECs trade for $150-250 each in recent years
• Provides ongoing income for 15+ years
• Significantly improves system economics

Net metering New Jersey requires utilities to offer net metering with full retail rate credits for excess power sent to the grid.

Property tax exemption Solar installations are exempt from property tax assessments, protecting you from increased taxes despite added home value.

Sales tax exemption Solar equipment and installation are exempt from New Jersey's 6.625% sales tax.

Cost and payback in New Jersey

Average installation cost Solar panels in New Jersey cost an average of $3.30 per watt before incentives. A typical 6kW system costs:

• Gross cost: $19,800
• After federal tax credit (30%): $13,860
• With SREC income: Additional $1,500-2,500 annually

Payback time With New Jersey's high electricity rates (average $0.17/kWh), net metering, and SREC income, most solar systems pay for themselves in 7-9 years.

Annual savings A typical 6kW system in New Jersey generates about 7,500 kWh annually, saving homeowners $1,275 per year on electricity bills, plus SREC income.

Net metering and electricity rates

New Jersey's net metering policies are solar-friendly:

• Full retail rate credit for excess power exported to the grid
• Annual true-up with rollover of unused credits
• No system size limits for residential installations

Average electricity rates in New Jersey are $0.17/kWh, making solar savings substantial.

Best solar companies in New Jersey

New Jersey has many qualified solar installers. We recommend getting quotes from:

• SunPower: Premium panels with excellent warranties
• Sunrun: Comprehensive financing and service options
• Tesla Solar: Competitive pricing with battery integration
• Local installers: Often provide competitive pricing and personalised service

Get quotes from at least three installers to compare pricing and proposals.

SREC market and long-term value

The SREC market provides significant long-term value:

• Current SREC prices: $150-250 per certificate
• System lifetime: 15+ years of SREC eligibility
• Annual income: $1,500-2,500 for typical residential systems
• Market stability: Strong demand from utility compliance requirements

Next steps

1. Calculate your potential savings with our solar calculator
2. Check your roof's solar potential (south-facing roofs work best)
3. Get multiple quotes from certified installers
4. Understand SREC registration (your installer typically handles this)
5. Review financing options including cash, loans, and power purchase agreements

New Jersey's combination of strong policies, SREC income, and high electricity rates make solar an excellent investment in 2025.

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