Is Solar Worth It in New Jersey in 2026?
New Jersey has some of the most expensive electricity in the country — homes here paid about 22.6¢ per kWh in 2025, up 93 percent since 2005, with the last decade alone climbing roughly 3.7 percent a year. That's the backdrop for every solar decision in the state: expensive power makes every kilowatt-hour a panel produces worth more. A typical Newark-area system produces about 1,341 kWh per installed kilowatt per year — solid mid-Atlantic production, not Florida-level sun, but paired with 22.6¢ power it doesn't have to be.
The honest complication is 2026. The 30 percent federal tax credit that used to make this an easy call ended for systems completed after December 31, 2025. What's left is New Jersey's own stack — full 1-for-1 net metering, 15 years of SREC-II cash payments, and a full sales and property tax exemption — one of the strongest state-level stacks in the country. That doesn't erase the federal credit's absence, but it cushions it more than most states manage. Expect payback around 9 to 13 years for a cash purchase in 2026, a few years longer than the pre-2026 pitch, with SREC-II payments doing real work to close the gap. Run your own numbers below before you sign anything.
New Jersey Electricity Prices
Solar is a bet that today's electricity price is the cheapest you'll ever see. New Jersey's history makes that bet look reasonable: rates are up 93 percent since 2005, and the last decade's pace — about 3.7 percent a year — is faster than general inflation most years.
Full New Jersey electricity price data (1990–2025)
| Year | New Jersey (¢/kWh) | US avg (¢/kWh) |
|---|---|---|
| 1990 | 10.4 | 7.8 |
| 1991 | 10.8 | 8.0 |
| 1992 | 10.9 | 8.2 |
| 1993 | 11.4 | 8.3 |
| 1994 | 11.5 | 8.4 |
| 1995 | 12.0 | 8.4 |
| 1996 | 12.0 | 8.4 |
| 1997 | 12.1 | 8.4 |
| 1998 | 11.4 | 8.3 |
| 1999 | 11.4 | 8.2 |
| 2000 | 10.3 | 8.2 |
| 2001 | 10.2 | 8.6 |
| 2002 | 10.4 | 8.4 |
| 2003 | 10.7 | 8.7 |
| 2004 | 11.2 | 9.0 |
| 2005 | 11.7 | 9.5 |
| 2006 | 12.8 | 10.4 |
| 2007 | 14.1 | 10.7 |
| 2008 | 15.7 | 11.3 |
| 2009 | 16.3 | 11.5 |
| 2010 | 16.6 | 11.5 |
| 2011 | 16.2 | 11.7 |
| 2012 | 15.8 | 11.9 |
| 2013 | 15.7 | 12.1 |
| 2014 | 15.8 | 12.5 |
| 2015 | 15.8 | 12.7 |
| 2016 | 15.7 | 12.6 |
| 2017 | 15.7 | 12.9 |
| 2018 | 15.4 | 12.9 |
| 2019 | 15.9 | 13.0 |
| 2020 | 16.0 | 13.2 |
| 2021 | 16.4 | 13.7 |
| 2022 | 16.7 | 15.0 |
| 2023 | 17.7 | 16.0 |
| 2024 | 19.3 | 16.5 |
| 2025 * | 22.6 | 17.3 |
Source: US EIA, average residential retail electricity price. Values in cents per kWh. * 2025 is preliminary.
New Jersey's grid leans on nuclear, gas, and imported power through the PJM regional market, so price swings often track regional fuel costs and grid congestion rather than anything happening only inside the state. The practical read: a household locking in solar production today is hedging against a rate history that has never gone in reverse for more than a year or two at a time.
The New Jersey Sun, Month by Month
At 40.4°N, New Jersey sits solidly in the mid-Atlantic — summer days are long and the sun climbs high, but winter days are short and low, so production swings more across the year than in the Sun Belt. August is the strongest month at index 129, December the weakest at 85 — a gap driven by day length, the sun's lower winter angle, and the state's share of overcast coastal storm systems in winter.
New Jersey monthly solar production data
| Month | kWh per installed kW |
|---|---|
| Jan | 91 |
| Feb | 105 |
| Mar | 120 |
| Apr | 113 |
| May | 124 |
| Jun | 125 |
| Jul | 126 |
| Aug | 129 |
| Sep | 118 |
| Oct | 114 |
| Nov | 92 |
| Dec | 85 |
| Year | 1342 |
Source: NREL PVWatts typical-year estimate (Newark), per installed kW at latitude tilt.
Don't size a system purely off your highest summer bill — a New Jersey system needs to be sized around the annual average, since winter months will underproduce regardless of array angle. Net metering is what makes this workable — see the section below for how the annual true-up handles that seasonal swing.
What Solar Costs in New Jersey in 2026
Installed solar in New Jersey runs about $2.75 to $3.15 per watt as of 2025–2026, with some sources clustering closer to $2.77–$3.05/W and others citing up to $3.36/W depending on system size and installer. A typical New Jersey residential system lands in the 8–12.7 kW range, putting a full install commonly between $25,000 and $40,000 before any incentive. There's no single official state source for cost per watt — these figures come from aggregators like EnergySage, SolarReviews, and NuWatt, so treat any one quote as a data point and compare at least three.
| System Size | Typical 2026 Cost | Roughly Offsets | Fits |
|---|---|---|---|
| 5 kW | $13,750 to $17,500 | ~6,705 kWh/yr (~$126/mo at 22.6¢) | Smaller home, lower usage |
| 8 kW | $22,000 to $28,000 | ~10,728 kWh/yr (~$202/mo) | Average New Jersey home |
| 12 kW | $33,000 to $42,000 | ~16,092 kWh/yr (~$303/mo) | Large home, higher usage |
New Jersey's sales tax exemption applies to the full system and labor cost, worth more here than in most exempt states simply because New Jersey systems cost more up front. The property tax exemption means none of that added home value shows up on your assessment either.
Estimate Your New Jersey Payback
The calculator below is set to New Jersey's average rate and typical Newark-area production. Enter your monthly bill for an estimated system size, payback period, and 25-year savings. New Jersey's rates have climbed about 3.7 percent a year over the last decade — a reasonable starting point for the inflation field, though you can drag it to test other futures.
New Jersey Solar Incentives in 2026
What's gone: the 30 percent federal Residential Clean Energy Credit ended for installations completed after December 31, 2025. If a purchase quote still nets out the old 30 percent, that installer hasn't updated their pitch — ask what else in the proposal is stale.
What's still here is unusually strong for a state without a federal credit to lean on:
- SuSI / SREC-II (ADI program): Every net-metered residential system earns one SREC-II certificate per MWh produced, paid quarterly for 15 years from interconnection at a fixed rate locked in at registration — a direct cash payment, not a tax credit. Full mechanics below.
- Sales tax exemption: No sales tax on solar equipment or labor — a real savings given the state's above-average installed cost.
- Property tax exemption: Under N.J.S.A. 54:4-3.113a et seq., the value solar adds to your home is excluded from your assessment, automatically in most towns (some ask for a one-time filing with the local assessor).
- Leases and PPAs: Third-party-owned systems can still capture a separate federal business credit (48E) through 2027. That credit belongs to the leasing company, not you — it may show up as a lower monthly rate, or it may just pad their margin. Compare a lease quote against a cash or loan purchase, including the SREC-II payments you'd forfeit by not owning the system.
New Jersey has no state income tax credit or upfront rebate for residential solar — SREC-II plus the two exemptions are the whole state stack, and together they do more work than most states manage without a federal credit.
Net Metering and SuSI/SREC-II in New Jersey
New Jersey mandates full 1-for-1 retail-rate net metering statewide across all four investor-owned utilities — PSE&G, JCP&L, Atlantic City Electric, and Rockland Electric — under the BPU's net metering rules (N.J.A.C. 14:8-4). Every kWh your panels export offsets a kWh of usage at the full retail rate, credited monthly with an annual true-up (typically the May billing cycle). Surplus left over at that true-up is paid at the utility's avoided-cost/wholesale rate instead — meaningfully lower, so there's little upside to deliberately oversizing a system for export income. As of mid-2026 there's no sign New Jersey is weakening this, unlike states shifting to net billing; it remains one of the strongest net metering regimes in the country.
Layered on top is SuSI's Administratively Determined Incentive (ADI) pathway, better known by its old name SREC-II: your system earns one certificate per MWh produced, paid quarterly for 15 years at a fixed per-MWh rate locked in when you register — separate cash, on top of the electricity bill savings above, not a competing program.
The SREC-II Rate Cut Taking Effect July 27, 2026
This is the single most time-sensitive fact on this page. Per the BPU's order on Docket Nos. QO20020184 and QO26030096 (Agenda Date 5/21/2026), the residential SREC-II rate is being cut from $85/MWh to $77/MWh — an $8/MWh, roughly 9 percent reduction — for any new system registered on or after July 27, 2026. Systems already registered keep their locked-in $85/MWh for the full 15-year term.
In dollars, a typical 8–9 kW system earns roughly $765 to $816 a year at $85/MWh, versus $650 to $700 a year at $77/MWh — over $1,700 apart across 15 years. Some solar blogs cite a different figure ($76.50/MWh effective March 2026); that appears to conflate this change with an earlier, separate cut affecting only the Community Solar Energy Program, not net-metered residential ADI — treat $77/MWh effective July 27, 2026 as authoritative since it comes from the primary BPU order. Worth noting: New Jersey allocates ADI incentives through annual MW capacity blocks by segment, and this same order shifted 15 MW from non-residential to residential for EY2026 because residential registrations were pacing to exceed the 285 MW cap — availability at a given rate isn't guaranteed indefinitely the way an open-ended tax credit is.
How to Go Solar in New Jersey
Work through these steps in order before you sign anything.
- Pull your last 12 power bills and find your average monthly cost — New Jersey's seasonal swing means one summer or winter bill alone will mislead you.
- Check that your roof faces south, east, or west with minimal shading, and confirm it has at least 10 to 15 years of life left — replace an aging roof first. See the warning signs in our roofing guide.
- Get at least three quotes and compare price per watt, equipment, and warranty — make sure none still bake in the old 30 percent federal credit.
- Ask each installer for your SREC-II registration timeline specifically, not just the install date, given the July 27, 2026 rate cut.
- Confirm net metering enrollment with your utility (PSE&G, JCP&L, Atlantic City Electric, or Rockland Electric) and check with your insurer how panels affect your policy — see our home insurance guide.
- If a panel upgrade is needed for the inverter, confirm the electrical work is permitted and inspected — see our electrical guide.
For how solar technology works, sizing, and buying versus leasing in general, read our main solar panels guide — this page covers what's specific to New Jersey.
Sources
Figures on this page are 2026-current. Federal credit repeal: IRS — Residential Clean Energy Credit and Congressional Research Service IN12611. SREC-II/ADI rate cut: NJ BPU Order, Docket QO20020184/QO26030096 and the NJ Clean Energy ADI program page. Net metering and exemptions: DSIRE — net metering, DSIRE — property tax exemption, and N.J.S.A. 54:32B-8.33. Cost data: EnergySage — NJ solar cost and EnergySage — JCP&L net metering. Rate history: US EIA. Production: NREL PVWatts. Reviewed every six months.