In New Jersey, a typical residential solar panel system costs $9,935 to $27,653, depending on the size of your system and what financial incentives you qualify for.
Jump to insightNew Jersey residents can get the retail rate when they sell excess solar power to the local grid.
Jump to insightLeasing or entering a power purchase agreement (PPA) is often cheaper upfront, but you won’t be eligible for the federal solar tax credit and other financial incentives.
Jump to insightSolar tax incentives in New Jersey
The federal solar investment tax credit (ITC) is still the most significant financial incentive for many homeowners buying solar panels in New Jersey. It reduces your federal tax liability by 30% of how much it costs to install solar panels. The ITC drops to 26% in 2033 and then 22% in 2034.
- Federal solar tax credit: The ITC is a credit, meaning it directly decreases the amount of taxes you owe. For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If in the year your system becomes operational, you owe $15,000 in taxes, the ITC reduces what you owe to $12,000.
- State sales tax exemption: Solar systems are exempt from sales tax at the time of purchase. This exemption helps lower the installation costs for high-performing solar panels.
- State property tax exemption: Homeowners can benefit from increased property value for installing a solar system without paying additional taxes. This incentive makes going solar even more economically appealing in New Jersey.
Federal solar tax credit expires at the end of 2025
The ITC is now set to expire at the end of the year, much earlier than previously scheduled. The credit was expected to drop gradually, then fully expire in 2035 — but those future step-downs have been eliminated under the “One Big Beautiful Bill,” signed in July of 2025. This means you have until Dec. 31, 2025, to install and pay for a system to qualify for the 30% credit.
Successor Solar Incentive (SuSI) program
The SuSI program launched in August 2021 with the aim of supporting the development of 3,750 megawatts (MW) of new solar generation by 2026, effectively doubling the state’s current solar capacity and driving solar to become approximately 10% of the state’s total electricity supply. The program provides energy credits for every mWh produced by your solar system.
The SuSI includes two sub-programs, of which the Administratively Determined Incentive (ADI) Program offers incentives for homeowners and small-scale commercial projects (5 MW or less), plus all community solar projects.
The SuSI program works by awarding financial incentives for every mWh you generate with your solar panels. It’s called the TREC (Transition Renewable Energy Certificate) system; this program was called SRECs (Solar Renewable Energy Certificates) but changed to TRECs on May 1, 2020.
SRECs vs TRECs
The SREC system was based on redeeming certificates in a complicated, unpredictable market. New Jersey streamlined the process with TRECs that have a fixed value over the 15-year period of the program.
Currently, the new TREC certificates are valued depending on factors like system type, size and scope of the solar panel system. A residential installation can claim $91.20 per TREC redeemed, while commercial installations earn the full $152 per stored MWh of energy. The TREC program is open to all eligible net metering customers in New Jersey. TRECs are generated in addition to net metering benefits and do not affect the amount of electricity used on-site.
Additional solar incentives in New Jersey
The Residential New Construction program provides a generous financial incentive for builders who meet or exceed EPA Energy Star program standards. Qualifying builders can receive $500 to $1,200 per home plus an additional $30 per MMBtu saved in energy costs. Check DSIRE for the most comprehensive source of information about solar incentives and policies in New Jersey.
| Incentive type | Amount | Eligible solar equipment | Applicable sectors | Administrator | |
|---|---|---|---|---|---|
| Garden State Commercial Property Assessed Clean Energy Loan Program (C-PACE) | Commercial loan program | Loan for property owners to pay for energy improvements | Solar panels, solar water heating and solar space heating systems | Commercial, industrial, multifamily residential (5+), agricultural, schools | State of New Jersey with local municipalities able to opt in |
| Successor Solar Incentive Program - Competitive Solar Incentive (CSI) | Commercial financial incentive | Awards payouts through renewable energy certificates on a pay-per-bid mechanism and continues for 15 years | Solar panels | Grid supply and non-residential net metered solar projects with nameplate capacity greater than 5 MW | New Jersey Board of Public Utilities |
What to know about net metering in New Jersey
New Jersey's net metering program serves as a model for other states to incentivize people to invest in renewable energy. The four electric utility companies regulated by the New Jersey Board of Public Utilities — PSE&G , Jersey Central Power & Light, Atlantic City Electric and Rockland Electric — all offer net metering by state mandate.
How it works
Net metering lets you earn credits for any extra electricity that you send to the local power grid. When your system generates more electricity than you use, the utility meter spins backward, giving you credits. If your system doesn’t generate enough electricity, the utility meter spins forward, taking away credits. On sunny days, you sell your extra electricity; on cloudy days, you can buy a little back.
Why it’s worth it
Residents with eligible solar panel systems receive the full retail rate in bill credits for each kWh of electricity their system produces over the course of a year. At the end of the billing year, the customer receives credits in the wholesale value for any excess generated electricity that remains.
Marla in Paulsboro, New Jersey, got credit for generating an extra 3,200 kWh last year. When we followed up, she told us the panels still generate plenty of electricity. She expects to get $600 to $900 back each year.
Marisol in Perth Amboy, New Jersey, is also coming out ahead. She said she earns $182 or $200 per month, which is enough to pay her solar loan “plus two tanks of gas.”
How much are solar panels in New Jersey?
After considering the federal solar tax credit, solar panel costs in solar panel costs in New Jersey typically range from $9,935 to $19,870.
Leasing or entering a power purchase agreement (PPA) is often cheaper upfront, but you won’t be eligible for the federal solar tax credit and other financial incentives.
Your system size greatly affects how much you pay overall. The typical system size for solar systems in New Jersey is 7.5 kW (kilowatts). You might need a larger or smaller system, depending on your average household energy usage.
Average solar cost by system size in New Jersey
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Before federal tax credit | $13,827 | $16,592 | $19,357 | $22,122 | $24,888 | $27,653 |
| After federal tax credit | $9,935 | $11,922 | $13,909 | $15,896 | $17,883 | $19,870 |
Solar resources in New Jersey
Here are some more resources with helpful information about going solar in New Jersey.
Find solar companies in New Jersey
A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for New Jersey’s top solar companies to learn more.
| Company | Customer rating | Pro install | Payment options | Year founded | |
|---|---|---|---|---|---|
 Sunrun | Get Started | 4.3 |  | Cash, loan, lease | 2007 |
 Project Solar | Learn More | 4.3 | | Cash, loan | 2016 |
 Momentum Solar | Learn More | 1.2 | | Cash, loan, lease | 2009 |
 CleanChoice Energy | Learn More | 1.5 |  | Varies | 2012 |
 ShopSolar | Learn More | 4.7 | | Cash, loan | 2018 |
FAQ
Can I get free solar panels in New Jersey?
You can lease or enter a PPA with little to no upfront costs. Still, neither is totally free. Solar leases generally require a flat monthly fee; PPAs make you pay per unit of electricity.
» MORE: Solar lease vs. solar PPA
How does a PPA work?
A solar power purchase agreement (PPA) works similarly to a lease. A solar developer buys, installs and maintains the panels on your property, and you pay for the power generated on a per kilowatt-hour (kWh) basis. The cost per kWh is typically lower than the utility's rate for the same amount of electricity. It's a good option to get solar without high upfront costs, but you’ll miss out on some tax incentives.
Is my HOA allowed to restrict solar panels?
No. New Jersey Statute § 45:22A-48.2 clearly states that homeowners associations (and similar organizations) “shall not adopt or enforce a restriction, covenant, bylaw, rule or regulation prohibiting the installation of solar collectors on certain roofs of dwelling units.” However, an association can regulate the installation and maintenance of your solar panels.
Can I get free solar panels in New Jersey?
No, but you can enter a solar lease or PPA with little to no upfront costs. Still, neither is totally free. Solar leases generally require a flat monthly fee; PPAs make you pay per unit of electricity.
» FREE SOLAR PANELS: Are they really free?
How can I pay for solar panels?
You can pay cash, but most people finance solar panels with a solar loan. It works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest). You also have the option of getting a lease or power purchase agreement.
» SOLAR PANELS: Lease vs. buy
How much can I save with solar panels in New Jersey?
On average, New Jersey homeowners with solar panels avoid $87,420 in utility costs over 25 years. Even if you don’t generate 100% of your energy needs, you can still save a lot of money versus paying traditional utility bills. In New Jersey, solar panels usually pay for themselves within 7.52 years.
» EXPLORE: Where solar savings go the furthest
How do I know if my house is a good candidate for solar?
It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper
The condition of your roof matters too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels again. This will cost around $5,000 for a 19-panel setup.
Solar photovoltaic (PV) technologies, more commonly known as solar panels, absorb sunlight and convert it into usable electricity. If you have a lot of shading around your house, they might not get enough sun to power your home.
What has New Jersey’s investment in solar been so far?
Total solar investments in the state amount to $15 billion, according to the Solar Energy Industries Association.
Bottom line
State policies have already encouraged rooftop solar projects, according to the Energy Information Administration. Residents can also invest in community solar projects if they wish, under a newly permanent state program.
The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar and incentives in other states. Turns out, it’s worth it for many homeowners, particularly in New Jersey.
Solar costs vs. savings: New Jersey and nearby states
| 6-kW system cost (before incentives) | 10-kW system cost (before incentives) | Typical system size needed* | Average cost per watt | Total utility power cost savings** | |
|---|---|---|---|---|---|
| Delaware | $13,934 | $23,224 | 7.7 kW | $2.32 | $54,494 |
| New Jersey | $16,592 | $27,653 | 7.5 kW | $2.77 | $87,420 |
| New York | $16,641 | $27,734 | 6.9 kW | $2.77 | $57,678 |
| Pennsylvania | $15,802 | $26,336 | 7.8 kW | $2.63 | $65,657 |
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- DSIRE, “New Jersey Programs.” Accessed March 29, 2024.
- EnergySage, “The cost of solar panels in New Jersey.” Accessed March 29, 2024.
- Solar Energy Industries Association (SEIA), “New Jersey Solar.” Accessed March 29, 2024.
- SolarReviews, “How much do solar panels cost in New Jersey, 2024?” Accessed March 29, 2024.
- NJBIZ, “Community solar program now permanent in NJ.” Accessed Aug. 9, 2024.
- U.S. Energy Information Administration, “Record U.S. small-scale solar capacity was added in 2022.” Accessed Aug. 9, 2024.
