Rising electricity rates make solar panels an attractive alternative for New Jersey consumers trying to lower energy costs.
Between federal and local incentives, it’s become more feasible and more affordable for homeowners in the state to switch to clean energy. One of the biggest incentives is a major tax credit included within the Inflation Reduction Act, providing a 30% rebate on the cost of clean energy additions to your household once tax season arrives.
Solar panels purchased for New Jersey homes are also exempt from sales tax. Under the Successor Solar Incentive Program, homeowners are able to receive one Solar Renewable Energy Credit worth $90 for every megawatt-hour of energy their solar panel system produces.
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Here’s a look at some of the top solar companies operating in New Jersey and how to make the most of your solar investment.
Best national solar companies in New Jersey
Local solar panel installation companies in New Jersey
How to determine which solar company in New Jersey is best for me
You’ll want to find a solar installer that has experience with the kind of solar project that you’re interested in. Make sure your installer has experience working with the type of roof that you have, and the type of solar system you want installed, like on-grid or off-grid.
Look for installers that are certified by the North American Board of Certified Energy Practitioners and have the right licensing and bonding for their work. Reading online reviews from multiple sources can also help you get a better understanding of an installer’s reputation. A few places to look for solar company reviews are Google, Yelp and Angi (formerly Angie’s List). Try to find companies that have at least 20 to 30 reviews. If you know someone who has solar panels on their home, you can ask them for installer recommendations too. Shop around and gather multiple quotes to get the best price possible.
“We advise people to always get at least three bids from installers so that you’re able to make comparisons and find an installer that works best for your needs,” said Ben Delman, a communications director with Solar United Neighbors, a clean energy nonprofit.
Aside from certifications and reviews, there are a few other things to look for in a solar company. A good installer, Delman said, will be able to:
- Provide good word-of-mouth references
- Clearly explain the project and working deadlines
- Define technical terms in an easy-to-understand manner
- Be transparent about pricing and how system financing works
- Understand the local permit requirements and the process for system interconnection with the local power company
- Understand homeowners association restrictions and help you navigate and explain that process
A reputable installer should be able to answer any questions you may have, no matter how difficult those questions might be. Don’t be afraid to ask for clarification on any project and pricing details.
Average cost of solar panels in New Jersey
Here’s a look at the cost of an average solar panel system in New Jersey compared to the national average cost for a solar panel system before factoring in tax credits incentives, according to data from FindEnergy.com.
Average cost of solar panels in New Jersey
|Typical system size (kW)
|Price per watt
|Total installed cost
|Cost after 30% federal tax credit
This infographic shows the average total price, cost per watt and system size for solar panel systems across different states, according to data from FindEnergy.com. The prices shown are not final, as they do not include cuts from tax credits or state solar incentives. If FindEnergy doesn’t have solar data for a particular state, it appears grayed out on the map.
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.
New Jersey solar incentives
|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.
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.
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.