With its dense population and high energy needs, New Jersey may seem an unlikely leader in solar power. Yet the Garden State ranks 8th nationally in installed solar capacity, producing over 4.4 gigawatts to date. This thriving market presents a compelling opportunity for NJ homeowners to go solar and slash utility bills. But with so many factors affecting price, where do you start?
This complete guide breaks down everything you need to know about the costs and savings of installing solar panels in New Jersey. Read on for expert advice on calculating system size, finding the best installer, maximizing incentives, and achieving an attractive return on investment.
The Price Rundown: What Do Solar Panels Cost in New Jersey?
In the Northeast, NJ tends to have some of the highest solar equipment costs, currently averaging around $2.78 per watt. For a typical 6 kilowatt system, that equates to roughly $16,680 before incentives. With national average installation prices closer to $2.50/watt, what accounts for the premium in New Jersey?
Location plays a big role. "NJ‘s solar market is really driven by incentives, and there‘s a lot of competition among installers," explains Michael Kadish, Director of Project Development at Amicus Solar Cooperative. "When you combine high demand with permitting challenges in a dense state like NJ, costs can be higher than elsewhere."
Fortunately, there are ways to overcome the area‘s price premiums. The 30% federal tax credit offers an immediate discount, bringing that $16,680 system down to $11,676. NJ‘s strong solar policies also help improve the math for homeowners through generous REC prices, net metering, property tax exemptions, and sales tax waivers.
But before crunching the numbers, it‘s important to right-size your system…
Calculating Your Solar Needs in NJ
While 6 kilowatts (kW) represents the average residential solar array nationwide, your home‘s energy use determines the ideal system size. Larger houses or intensive loads may require 8-10+ kW, while conservative users might need only 3-4 kW.
The formula is simple: Take your home‘s average daily kilowatt-hour electricity use and divide it by your area‘s peak sun hours.
For example, the typical NJ home uses 22.8 kWh per day. In areas seeing 4.2 sun hours like Newark, the calculation would be:
22.8 kWh / 4.2 hours = 5.4 kW solar array
Using NJ‘s statewide averages, a 5.4 kW system costing around $15,012 would suit most households after the federal credit. But your needs may vary considerably based on location and lifestyle. Be sure to account for energy-intensive features like pools and EV charging.
Now let‘s explore other factors impacting NJ solar pricing…
Why Location Matters
Thanks to its extensive shoreline, NJ stretches across multiple solar irradiance zones. Homeowners in sunnier southern cities like Atlantic City (averaging 4.6 daily sun hours) can downsize panels versus northern areas like Sussex county (3.9 hours). Access to ample solar resources lowers overall equipment needs.
Geography also affects permitting costs. Installing solar in dense, older suburbs can mean pricier structural reviews and more complex regulations. Rural areas tend to present fewer barriers.
To illustrate solar‘s regional price differences, here are the installation averages across nearby states:
- New Jersey: $16,680 (for 6 kW)
- New York: $15,337
- Pennsylvania: $14,960
- Delaware: $15,585
- Connecticut: $17, Macquarie
Overall, NJ remains competitive regionally, but shopping around within the state can yield even better value.
Panel Types: Mono vs. Poly
While most residential systems utilize either monocrystalline or polycrystalline silicon panels, their efficiency and price differs:
Monocrystalline (mono): Made from a single silicon crystal, mono panels have sleek black appearance and higher efficiency ratings of 15-22%. However, they also cost about 5-10% more than poly.
Polycrystalline (poly): Formed by multiple silicon crystal fragments, poly panels exhibit lower efficiency of 13-16% but cheaper pricing. Their distinctive bluish color comes from embedded crystal fragments.
According to Tom Lynch, President of solar installer Astrum Solar, "In unshaded installations, poly is a great option for maximizing value. But for complex roofs or low-light areas, spending a bit more for mono can pay off via better production."
When weighing panel types, be sure to balance upfront costs against anticipated long term energy output.
Choosing the Right Installer
With over 250 solar companies operating locally, New Jersey offers homeowners tremendous installer choice. But not all contractors are created equal.
Industry experience matters when assessing providers. Firms like Courier Solar, Amicus Solar Cooperative, and Renova Energy boast over 20+ years in solar, along with hundreds of successful residential projects. Less established players can still deliver quality work, but proven expertise reduces risk.
Understanding the brands a company carries also tells you something about quality. Well-regarded panel manufacturers include REC, LG, Panasonic, SunPower, and Tesla. Ask installers which products they use and why.
Look for transparency surrounding costs. Reliable solar providers will break down detailed price estimates upfront, clearly outlining equipment, labor, permitting fees, and profit margin. Avoid firms that won‘t disclose breakdowns.
Finally, check that your installer offers strong warranties. Workmanship coverage should last 10 years, while top panels carry 25-year power production guarantees. This protects your investment.
Federal Tax Credit: Up to 30% Off
The federal solar Investment Tax Credit (ITC) remains one of the most valuable incentives around. This program offers a 30% tax credit for systems installed through the end of 2023, dropping annually thereafter. There is no maximum claim limit.
To illustrate the potential savings, let‘s revisit our 6 kW NJ system example:
- Initial pre-incentive cost: $16,680
- Federal tax credit (30% of $16,680): $5,004
- Final cost after ITC: $11,676
At higher system sizes, the credits grow even larger. The ITC delivers instant savings for zero hassle, as long as you have sufficient tax liability to benefit.
Net Metering: Your Power to the Grid Credits
NJ is one of 40+ states offering net metering, a billing scheme that lets solar owners earn financial credits for surplus energy exported to the grid. As your panels generate more power than you use during peak daytime hours, your utility meter spins backwards. Those excess kilowatt-hours earn credit toward nighttime consumption from the grid.
Monthly charges are netted out based on total power consumed from and supplied to your utility. This helps offset fixed costs like connection fees and further reduces your effective price per kWh. It‘s a powerful benefit that keeps your bills ultra low.
SREC Trading: NJ‘s Solar Renewable Energy Certificates
NJ runs one of the country‘s most robust solar renewable energy certificate (SREC) programs. For each 1,000 kWh generated by your panels, you‘ll earn one SREC that can then be sold on the open market for additional income. In 2023, SRECs are trading around $225.
So on a 5 kW system in NJ producing about 6,500 kWh per year, you‘d generate around 6 SRECs annually. At current prices, that‘s $1,350 extra income each year! While SREC values fluctuate over time, conservative estimates still yield 5-figure lifetime earnings for solar owners.
Solar Sales Tax Exemption
Unlike almost any other home improvement project, NJ exempts solar installations from paying any sales tax. With the average sales tax rate around 6.625%, this exemption provides at least $1,000 in savings on a typical 6 kW system. The waiver applies to all equipment, accessories, and installation labor.
Property Tax Exemption
Under this incentive, the value added by a solar array does not get factored into your home‘s assessed value for property tax purposes. Effectively, your property taxes will not increase due to adding solar. Given NJ‘s steep property taxes, that can mean substantial long term savings.
Financing: Loans, PPAs, and Other Options
Beyond incentives, creative financing can help cut the upfront sticker shock when going solar. Options include:
Loans: Secured or unsecured solar loans worth exploring come from local credit unions, banks, and specialized alternative lenders like Mosaic. Rates start around 3-4% for borrowers with good credit.
Power Purchase Agreements (PPAs): Under a PPA, a solar provider installs and owns your array while selling the generated power to you at a fixed rate. PPAs require no upfront cost and offer lower rates than your utility. But savings are smaller without direct ownership.
Leases: Similar to PPAs, solar leases let you go solar for $0 down in exchange for monthly payments to a provider that owns the system. Watch for escalators that gradually increase rates over time.
Manufacturer Financing: Top panel brands like SunPower, Tesla, and REC offer low APR financing starting around 0-1.49% for qualified applicants. This can make elite gear affordable.
Avoiding Shady Solar Contractors
With so many new solar providers chasing growth in NJ‘s hot market, scams and predatory actors unfortunately slipped in. Follow these tips to vet installers:
Verify all licenses and insurance. NJ requires contractors have a Home Improvement Contractor (HIC) license, among others. Call to confirm.
Check company reviews/complaints. Resources like the BBB, SolarReviews, and Angi provide transparent feedback from past clients.
Watch for door-to-door sales. Many scam artists rely on aggressive, pressured doorstep pitches. Decline these approaches.
Avoid 20+ year guarantees. Lifetime production guarantees are highly suspect – quality warranties last 20-25 years.
Read contracts closely. Check details on roof penetration, production estimates, property easements, and payment schedules.
Beware lowball bids. Pricing far below competitors likely means shoddy gear or corner cutting.
Ask about SREC management. Many scammers promise fantasy profits from SRECs then never register your system properly. Verify registration services.
Trust your gut: If an offer seems too good to be true, walk away. Plenty of reputable local installers exist.
Top Solar Installers in NJ
The following providers consistently rank among the leaders serving New Jersey homeowners based on certifications, experience, equipment, and service:
1. Trinity Solar
One of the largest and oldest solar providers in NJ, Trinity has installed over 25,000 systems statewide since 2001. They are an approved Tesla installer.
Services: Solar electric, storage, solar hot water
Notable Projects: Trinity has completed high-profile commercial installs for corporate clients like Whole Foods in addition to residential work.
2. Courier Solar
Courier Solar brings together 60 years of cumulative experience across its executive team. An A+ BBB rated contractor.
Services: Solar electric, custom installations
Operation: Servicing South NJ including Atlantic County, Camden County
Notable Projects: Historic projects on churches, barns, and homes needing custom integration.
3. Altitude Solar
A newer firm that‘s rapidly expanded thanks to a focus on custom craftsmanship and client education.
Services: Solar electric, EV chargers, batteries, pool heating
Operation: Services Central NJ and Jersey Shore areas
Notable Projects: High-end luxury residential installs and multi-technology projects.
4. Elite Solar & Roofing
Elite Solar & Roofing provide turnkey solar roofing solutions, having installed over 3,500 systems in the state.
Services: Solar electric, roofing
Operation: Northern NJ, Bergen County & Essex County
Notable Projects: Historic church installs, large commercial rooftop arrays
5. Blue Sky Power
Since 2009, Blue Sky has specialized in complex installs on older homes requiring creative integration. Their custom racking extracts maximum production.
Services: Solar electric, custom mounting
Operation: Central NJ, Monmouth County & Ocean County
Notable Projects: Victorian era homes, agricultural properties, historic renovations
Be sure to get quotes from at least 3 providers before deciding. And check SolarReviews.com for ratings on hundreds more local companies.
Return on Investment: When Do Solar Panels Pay Off in NJ?
Let‘s examine how quickly solar yields payback using real utility rates. We‘ll base calculations on a 5 kW system (sufficient for most NJ homes), installed at around $14,000 after the federal tax credit:
- NJ average electricity cost: $0.16/kWh
- Monthly usage: 683 kWh ($109/month bill)
- Annual electricity cost: $1,308
A 5 kW solar system in NJ will produce about 6,500 kWh annually. By multiplying your utility‘s rate by solar production, we get:
- 6500 kWh solar generation * $0.16 per kWh = $1,040 annual bill savings
Comparing the $1,308 spent originally on electricity to the new $1,040 spent with solar gives us ~$268 in yearly utility savings.
Dividing the post-credit cost of $14,000 by the $268 savings means you‘ll break even in 11 years. After that, another 10-15 years of electricity is basically free.
While paybacks are lengthier than sunnier states, NJ‘s high rates make solar a money saver in the long run. Plus, incentives like SRECs provide thousands in additional earnings.
Start Your Solar Savings in New Jersey
Thanks to its strong solar policies, New Jersey remains one of the best states to go solar despite its premium equipment prices. Generous incentives coupled with high utility rates create substantial lifetime savings potential for homeowners.
Be sure to account for your specific energy needs when sizing panels. And take time to thoroughly vet installers on credentials, equipment quality, and transparency.
While upfront costs may run higher than elsewhere, NJ solar delivers outstanding long term rewards. Contact local providers for custom estimates and get started with your solar project today!