New Jersey Solar Incentives at a Glance
Avg Cost per Watt
$2.90
6 kW System Cost
$17,400
Avg Electricity Rate
$0.18/kWh
Payback Period
5-8 years
25-Year Savings
$45,000-$68,000
Total Installations
270,000+
| State Tax Credit | No direct state tax credit, but SRECs/TRECs |
| Net Metering | Full retail rate |
| Property Tax Exemption | Yes |
| Sales Tax Exemption | Yes |
If you are considering going solar in New Jersey, understanding the full range of available incentives is essential to maximizing your return on investment. This guide covers every New Jersey solar incentive available in 2026 -- from state tax credits and utility rebates to net metering policies and tax exemptions -- so you can make an informed decision before signing a contract.
Federal Tax Credit No Longer Available
The federal residential solar tax credit (ITC) under Section 25D expired on December 31, 2025. It is no longer available for new residential solar installations in 2026. This guide focuses exclusively on New Jersey state and local incentives that are still available to help reduce your solar costs.
New Jersey State Tax Credits and Rebates
Instead of a traditional tax credit, New Jersey's primary state incentive is the Successor Solar Incentive (SuSI) program, which replaced the SREC program. Under SuSI, residential solar systems earn Transition Renewable Energy Certificates (TRECs) or Administratively Determined Incentives (ADIs) for the first 15 years of operation. These provide predictable ongoing income that significantly accelerates payback.
Net Metering in New Jersey
New Jersey Net Metering Policy: Full retail rate
New Jersey offers full retail-rate net metering for residential solar systems. Excess generation credits roll over month to month at the full retail rate and are trued up annually. Any remaining credits at the annual true-up are compensated at the wholesale rate. New Jersey's net metering policy is among the strongest in the nation.
Net metering is one of the most important factors in your solar ROI. It determines how much you are credited for excess energy your panels send back to the grid. In New Jersey, the net metering landscape directly affects your payback period and 25-year savings projections.
Property and Sales Tax Exemptions
Property Tax Exemption
Yes
New Jersey's Property Tax Exemption for Renewable Energy Systems (N.J.S.A. 54:4-3.113a) provides a 100% property tax exemption for the added value of solar energy systems. Your property taxes will not increase as a result of installing solar panels.
Sales Tax Exemption
Yes
New Jersey exempts solar energy systems from the state's 6.625% sales tax. This applies to all solar equipment, including panels, inverters, batteries, and installation components. On a $17,400 system, this saves approximately $1,150.
Tax exemptions reduce the total cost of going solar and provide ongoing savings. A property tax exemption means you add home value without increasing your tax bill. A sales tax exemption reduces the upfront purchase price. Together, these exemptions can save New Jersey homeowners hundreds to thousands of dollars.
Utility Rebate Programs in New Jersey
Beyond state-level incentives, many New Jersey utilities offer their own solar rebate and incentive programs. These can significantly reduce your out-of-pocket costs or provide ongoing production-based income.
SuSI Program (TRECs/ADIs)
New Jersey's Successor Solar Incentive program provides residential solar customers with TRECs worth approximately $90-$100 per MWh for grid-connected systems. A typical 6 kW system generates 7-8 MWh per year, translating to $630-$800 annually for 15 years.
PSE&G Solar Programs
Public Service Electric & Gas offers net metering and various clean energy programs for solar customers in its service territory, covering much of northern and central New Jersey.
NJ Clean Energy Program
New Jersey's Clean Energy Program, administered by the BPU, provides information and support for solar installations. The program coordinates with the SuSI incentive structure.
New Jersey's aggressive renewable energy goals (50% by 2030, 100% clean energy by 2035) drive strong solar incentives. The state's SuSI/TREC program provides a predictable income stream that, combined with full retail net metering and tax exemptions, gives New Jersey one of the fastest solar payback periods in the nation. Community solar is also available for renters and those without suitable roofs.
Solar Cost and Savings in New Jersey
| Metric | New Jersey Average |
|---|---|
| Cost per watt (before incentives) | $2.90 |
| 6 kW system cost (before incentives) | $17,400 |
| Average electricity rate | $0.18/kWh |
| Estimated payback period | 5-8 years |
| Estimated 25-year savings | $45,000-$68,000 |
| Total installations statewide | 270,000+ |
These figures represent statewide averages. Your actual costs and savings will depend on your specific location, roof characteristics, electricity usage, utility rate plan, and which incentives you qualify for. We strongly recommend getting at least three quotes from licensed installers to compare pricing for your specific situation.
For a detailed breakdown of solar costs across all 50 states, see: Solar Panel Cost by State (2026).
Is Solar Worth It in New Jersey?
New Jersey offers one of the best solar deals in the country thanks to its TREC income stream ($630-$800/year for 15 years), full retail net metering, and complete property and sales tax exemptions. Despite moderate sunshine, high electricity rates and strong incentives drive payback periods of just 5-8 years. New Jersey consistently ranks as a top solar state.
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Get Your Free New Jersey Solar Quote →Frequently Asked Questions
What are TRECs in New Jersey?
Transition Renewable Energy Certificates (TRECs) are part of New Jersey's Successor Solar Incentive (SuSI) program. Residential solar systems earn TRECs worth approximately $90-$100 per megawatt-hour of solar production for the first 15 years. A typical 6 kW system earns $630-$800 per year in TREC income, significantly improving your solar ROI.
Does New Jersey have net metering?
Yes. New Jersey offers full retail-rate net metering for residential solar. Excess energy credits roll over at the full retail rate month to month, with an annual true-up. This is one of the most favorable net metering policies in the country.
Is solar tax-free in New Jersey?
Yes, from a property and sales tax perspective. New Jersey provides a 100% property tax exemption for the added value of solar systems and exempts solar equipment from the 6.625% state sales tax. There is no state income tax credit, but the TREC program provides ongoing income that more than compensates.
How much does solar cost in New Jersey in 2026?
The average cost of a 6 kW solar system in New Jersey is approximately $17,400 ($2.90 per watt) before incentives. After TREC income, tax exemptions, and net metering savings, the effective cost drops significantly, with most systems paying for themselves in 5-8 years.
How long does it take for solar to pay for itself in New Jersey?
New Jersey has one of the fastest solar payback periods in the nation at 5-8 years. This is driven by the combination of TREC income ($630-$800/year for 15 years), full retail net metering, high electricity rates ($0.18/kWh average), and property and sales tax exemptions.
Learn More About Solar Incentives and Costs
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