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Solar installation costs do not include the 30% federal investment tax credit or local incentives.
New Jersey's solar incentives are some of the best in the country, making solar a popular home power option in the Garden State.
New Jersey is a longtime leader in solar energy and has some of the best incentives in the nation. The Garden State continues to incentivize people to go green with a top Renewables Portfolio Standard, a strong net metering program, significant tax exemptions, and Solar Renewable Energy Certificates. With incredible incentives like these, New Jersey remains one of the best places to go solar.
In the state of New Jersey, the average cost of solar panel installation ranges from $12,792 to $17,308. On a cost per watt ($/W) basis, a solar panel installation in New Jersey ranges in price from $2.56 to $3.46. See how New Jersey compares to solar panel costs across the U.S.
A critical calculation for potential solar buyers is the solar payback period. The solar payback period tells the customer the timeframe in which the initial investment is recovered through your solar system electricity savings. In New Jersey, the solar payback period is 7.77 years.
Regardless of the exact cost of installation, there are many affordable financing options for solar panel systems. Cash purchases are one common method to pay for solar and often lead to the most long-term value for your money. If an upfront purchase isn’t right for you, solar loans and solar lease/PPAs are available to help finance a solar energy system.
For property owners, you now can customize your solar panels, inverters, racking systems, and batteries, as well as the general aesthetic of the installation. This customizability has made it important for solar consumers to understand these various factors. For example, the best solar panels available may have premium efficiencies and warranties, but will typically be more costly. However, depending on the size of the installation, you’ll need to determine whether high-efficiency solar panels that can produce more electricity are worthwhile. Also, your appetite for risk can help determine which solar warranties best fit your needs. These are just a few of the many factors to consider when selecting solar panel equipment.
Aside from the power output of the solar equipment you choose to install, the amount of energy you generate with solar panels in New Jersey is directly related to the amount of sunlight that hits your panels. Even with a relatively low amount of peak sun hours, New Jersey ranks very high in solar output and capacity.
There are additional factors that determine how much solar electricity you can produce. These include shading and panel angle, which are used to calculate your total production estimate. a prediction of how much energy your solar installation will produce over time. This evaluation offers a clear estimate of how much energy your solar installation will produce. You can see how much solar panels can save you based on factors like geographic location and shading by using the EnergySage Solar Calculator.
Solar incentives in New Jersey can help you reduce the overall price of going solar. Learn more about why solar panels are such a great investment in New Jersey.
Learn about solar incentives in NJThe federal investment tax credit, now referred to as the Residential Clean Energy Credit for residential systems, has been one of the most reliable and impactful incentives for solar across the U.S. This solar incentive allows you to deduct 30 percent of the total system cost from your federal taxes. For example, a solar energy system installation that costs $15,000 out of pocket will qualify for a tax deduction of $4,500. For residential systems, this advantageous incentive lasts until the end of 2032 at which point it steps down to 26 percent. The federal ITC drops to 22 percent in 2034 and is eliminated for residential solar installations in 2035. Commercial systems are eligible at least through 2024, but may not be eligible for the full 30 percent depending on certain labor and domestic manufacturing requirements; they also may be eligible for specific ITC adders.
Besides the federal ITC, New Jersey has additional incentives for going solar that are dependent on your area and utility company. Of note are the Solar Renewable Energy Certificates, net metering program, and generous tax exemptions for your property and solar panel purchases. To learn more about New Jersey’s best financial incentives for solar, check out our complete overview of the state’s best solar incentives.
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Learn more about EnergySageOver the past decade, the Garden State has firmly established itself as a perennial leader in solar energy. As of 2018, New Jersey has installed over 2,700 megawatts (MW) of solar electricity capacity, ranking the state 6th in SEIA’s national rankings. While high electricity prices and decreasing solar costs have definitely been helpful aspects for this success, New Jersey’s solar policies have undoubtedly been the key driver in developing the industry in the state.
In 1978, New Jersey implemented Solar Easements regulations. Although the policy didn’t focus on financial incentives, it recognized solar energy use as a property right, ensuring that proper sunlight is made available to those who install solar-energy systems. Policymakers soon after passed the state’s first financial solar incentive with the Solar Energy Sales Tax Exemption in 1980. Today, the tax break continues to help save homeowners a considerable 7 percent on any purchased solar equipment.
New Jersey would hold off on passing any further policies until 1999, when the state’s electric-utility restructuring legislation required utilities to adopt net metering, a public benefits fund, and a Renewable Portfolio Standard (RPS). All three of these programs have been crucial to solar development in the Garden State, especially as they have been amended over the years.
Looking first at net metering, the Garden State maintains one of the top programs in the nation. Net metering is an energy billing system that provides homeowners credit based on how much net surplus generation is sent back to the electric grid. Where other net metering programs provide the lower wholesale or avoided cost rate for energy sold back to the grid, New Jersey’s utilities must compensate their customers at the higher retail rate each month, helping those consumers save more money on energy bills. Additionally, the state made solar even more accessible to all consumers by lifting the original system size cap.
The next major renewable policy to come from the 1999 electricity restructuring legislation was a public benefits fund, otherwise known as the Societal Benefits Charge (SBC). Since its inception, the purpose of the fund has been to support various statewide energy initiatives. It collects revenue through a non-bypassable charge of around 3.8 percent on every resident’s energy bill. In regards to renewable energy, the SBC funds the BPU-administered New Jersey Clean Energy Program (NJCEP), which has invested over $2.635 billion since 2001 to support energy efficiency and renewable technologies or subsidy plans. Accordingly, the NJCEP has calculated that from 2001 to 2010 alone their investments have generated approximately 18.7 MWh of renewable generation and that every dollar invested in the energy efficiency program returns $4.00 in savings for the residential customer.
While the aforementioned policies have been essential to the state’s solar development, the most significant policy may be New Jersey’s RPS. Similar to net metering, state energy requirements have been imperative to the development of clean energy across the nation. In this case, New Jersey has stood out amongst other states by continuing to increase its required renewable energy levels over the years. In the beginning of the program, the state first required utilities to source 4 percent of their retail electricity sales from renewable energy sources by 2012. The policy was amended in 2004, and again in 2006, to require utilities to supply 22.5 percent of electricity with renewables by 2021, as well as to include a solar carve-out of 2.12 percent. In 2018, New Jersey again increased its RPS requirement to 35 percent by 2025 and 50 percent by 2030, along with an additional bump in the solar carve-out to 5.1 percent by 2021.
A large reason for solar growth in New Jersey stems from the state’s Solar Renewable Energy Credits (SRECs) market. Created in 2004 as part of the RPS revision that established a solar carve-out, the purpose of this system has been to help utilities meet their RPS compliance levels. For residents, these solar performance payments have been the best financial incentive to go solar. Although prices are determined by market factors, in 2019 they have hovered around $220, meaning a 5-kilowatt (kW) system that generates 5 MWh per year, could sell those credits for as much as $1,100 each year. Importantly, the recent 2018 RPS revision will retire the current SREC market when the 5.1 percent solar carve-out is reached.
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