Make the best decision about investing in solar power in New Jersey
New Jersey has strong tax incentives, net metering, and a Renewable Portfolio Strategy that have boosted solar adoption the past few years. As of 2021 New Jersey ranks 7th in solar energy generation.
The average price for a home solar panel system in New Jersey is $12,345 or about $2.78 per watt. Systems will vary depending on the types of solar panels you choose and the size of your system. When shopping for solar panels you should consider getting multiple quotes from various installers.
The average payback period for solar panels in New Jersey is around 5 years years. Your payback period will depend on the cost of your system and the amount of power it generates. The more energy your system generates the faster it will pay for itself.
Everyone has their own method for determining if solar is “worth it”. If your objective is to leverage solar to eliminate or reduce your electric bill you have different expectations of someone who is more interested in reducing their carbon footprint.
To help you determine the best option for you you can use this solar calculator that will weigh different solar options and other renewable energy options.
While New Jersey has several great financial incentives that make solar a great option, there are other benefits for going solar as well. Here are the most common reasons residents in the Garden State are investing in solar panels.
Solar has roughly 20 times less carbon output than coal-powered energy sources. After three years of use, solar systems are completely carbon neutral and remain so for the duration of their lifespan.
In short, if you want to reduce your carbon footprint going solar is a great option.
When you have your own solar system you are putting energy back into the grid. Your utility rewards you by crediting back the value of the energy you put into the grid. For example, if your system generates 2,500 kWh in a month and you use 2,500 kWh in that month you would have a $0 electric bill.
In most cases, if your system generates more energy than you use the credits will roll over to the next month.
With the right solar system, you could potentially have a self-sufficient power system for your home. This means you don’t have to rely on the grid for energy. If the grid has an outage you could still power your home with your solar system.
Those who are trying to become energy independent often pair their solar system with a battery. This allows you to store electricity and use it when you need it.
Net metering is a billing mechanism that enables owners of solar panels to sell their excess energy back to the grid in the form of credits. For example, in June your solar panels generate 1,000 kilowatt-hours of energy but you only use 800 kWh you would receive a bill credit for the excess energy you put into the grid. These credits stack, so during the sunny summer months you can rack up substantial credits that will reduce your electric bill in winter when your panels get less sunlight. Net metering greatly improves the financial viability of solar since it enables you to reap the benefits of every kWh of energy you produce, regardless of when you produce it.
In New Jersey for every megawatt-hour (1 MWh = 1,000 kWh) of energy, your solar panels produce you generate one TREC. Your TREC can then be sold on a market to utilities to help them meet the state's Renewable Portfolio Standard (RPS). The market price for TRECs changes, but is generally worth $100 or more. If your system generates 8 MWh in a year that would mean an extra $800 towards your solar panel system. While $800 isn't enough to payoff your system, over the course of the life of your system, that total really adds up. Let's say you produce 7 MWh on average for the life of your 25-year system:
7 MWh x $100 X 25 years = $17,500
These credits are also called SRECs in some cases. Your solar installer can help you determine if your array will generate on the TREC or SREC market.
Solar panels in New Jersey are exempt from the state sales tax thanks to the PV energy sales tax exemption. That's the equivalent of 7% in savings. If your system totals $15,000, 7% savings is worth $1,050.
Like every other state, new solar panel systems in New Jersey are eligible to receive the federal solar tax credit of 26%. This credit is applied on your annual income tax credit.
There are many options when it comes time to purchase our solar panels. You can finance, lease, or pay the entire cost upfront. The right choice will depend on your financial situation and the costs of your system and other factors. Our solar calculator will help you weigh your options. You can find more information on leasing vs buying solar panels here.