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  • Writer's pictureSarah Lozanova

Installing Solar Panels In New Jersey: Incentives, Barriers And Considerations

Updated: Jul 3

New Jersey is a leading state for clean energy adoption, partly due to an ambitious Renewable Portfolio Standards (RPS). In particular, the Garden State is a leader in solar energy adoption, and nearly 7% of its electricity comes from solar installations, according to the Solar Energy Industries Association (SEIA).

It is in the top 10 solar energy-generating states, with a lot of small-scale solar power generation projects. New Jersey has a strong market for home solar system installations, and numerous incentives make residential and commercial solar energy projects a smart investment.

If you have clients in New Jersey, installing photovoltaic solar panels on their homes or businesses can dramatically reduce their energy bills for decades. As the cost of grid electricity increases, so will the savings from their system. From Atlantic City to Trenton and Newark, New Jersey has a thriving solar energy industry. Let’s explore why New Jersey is such a popular market for solar companies.

What Clients Should Consider Before Going Solar In New Jersey

Many home and business owners want to know if their solar investment will pay off and how much money they will save on their electricity bills. Although New Jersey is a hotbed for solar projects, not all properties are ideal.

Solar Potential Of The Property

Creating accurate projections for their solar energy generation that consider shading and solar orientation is critical for potential customers to make an informed decision. A solar site survey is an excellent opportunity for gathering such information, calculating the sun number for a property, and estimating the payback period for a solar panel system.

In addition, while evaluating the potential of the property, this is a good time to determine if there is a homeowners association your customer needs approval from to install solar panels.

Qualifying For Solar Incentives

Although no rebates are available in New Jersey, there are numerous incentives, and it is helpful to determine if potential customers can take advantage of them. For example, some homeowners might not have sufficient tax liability with the IRS to take advantage of the federal solar tax credit. A solar lease or power purchase agreement (PPA) might offer an alternative for financial investment in such cases.

Electricity Rates

Four electric companies serve New Jersey — Atlantic City Electric, Jersey Central Power & Light (JCP&L), Public Service Electric and Gas (PSEG), and Rockland Electric. Utility companies have different service areas. For example, Jersey City and Newark residents are in the PSEG service territory.

The average cost for residential electricity in New Jersey is 17 cents per kilowatt hour (kWh), a bit higher than the average national average of 16 cents. However, electricity rates can vary between electric companies. The higher the electric rate, the shorter the payback period can be for solar clients, when all other factors are the same.

Future Energy Needs

Some potential customers know their home energy use will change soon, and it’s a good idea to consider this when sizing a solar system. For example, they may install a heat pump and reduce the use of a gas boiler, increasing their home electricity use. Or maybe a household plans to get an electric vehicle and install a home EV charger, increasing electricity consumption.

Paying The Upfront System Cost

Some homeowners will need financing to purchase a photovoltaic solar system. Therefore, discussing solar loans and other financing options with New Jersey homeowners is a good idea.

New Jersey Solar Incentives

Numerous local and federal incentives are available in New Jersey to help make solar more cost-effective.

State- And Local-Level Incentives

Your residential and commercial customers may be eligible for several incentives available to New Jersey residents that install solar PV panels.

Net Metering Programs

New Jersey has net metering laws requiring utility companies to compensate solar system owners for excess solar electricity they feed to the grid. This means your customers can virtually eliminate their power bills if the solar panel installation produces sufficient power.

Solar Renewable Energy Credits (SRECs)

Solar homes in New Jersey can earn SRECs for generating solar power and sell solar renewable energy certificates to utility companies. Your customers can earn one credit when a solar system produces 1,000 kW. To qualify for payments for SRECs, they must register their solar system.

Solar Tax Incentives

The State of New Jersey offers some solar incentive programs to help lower or eliminate taxes for residential customers. For example, New Jersey has a sales tax exemption for purchasing solar panels, inverters, or other PV equipment. Likewise, there is a renewable energy property tax exemption, so your residential, commercial, and industrial customers won’t need to pay higher property taxes due to solar energy installations.

In addition, New Jersey has some incentives to encourage larger solar energy installations. For example, the Competitive Solar Incentive (CSI) is designed to promote large solar projects greater than 5 megawatts. In addition, New Jersey has a community solar pilot program that is encouraging growth in this market.

Federal Incentives For Going Solar

The investment tax credit (ITC) can reduce tax liability when installing a solar PV system by 30%. This includes all solar equipment, such as the cost of solar panels, inverters, and even a solar battery.

However, the system must be installed on a primary or secondary residence, and the homeowner must have a sufficient tax liability to take advantage of this solar incentive. Customers will see the benefit of the tax credit when they file for their taxes for the given tax year.

Frequently Asked Questions About Solar Panels In New Jersey

Let’s explore some of the FAQs potential customers may ask about rooftop solar systems.

Are there barriers to widespread solar adoption in New Jersey?

Because New Jersey is a densely populated state, there is little low-cost land available for solar farms. In particular, Hudson, Essex, Union, Bergen, and Passaic Counties have high population densities. Therefore, rooftop solar arrays are often easier to site.

Although New Jersey doesn’t have the same solar resources as New Mexico or Arizona, it receives sufficient solar radiation for installing solar panels. In addition, PV modules are sometimes covered by snow in the winter, but this doesn’t usually significantly impact total solar energy production.

Are solar panels worth it in New Jersey?

A solar energy system is a wise investment for many homes, but not all. For example, if there is excessive shading on the property or the roof needs to be replaced, installing solar panels might not be worthwhile.

According to the National Solar Radiation Database by the National Renewable Energy Laboratory, much of New Jersey has a similar solar resource as Connecticut, Rhode Island, West Virginia, Indiana, and Iowa, and properties get an average of about 3.5 to 4 peak sun hours.

Solar Panels Make Sense For Many In New Jersey

The state has an ambitious RPS and is actively working to transition to renewable energy sources. As a result, numerous solar incentives, such as tax exemptions, net metering, and SREC programs, are available to households and businesses. This creates an excellent opportunity for solar companies operating in the Garden State to establish thriving businesses due to strong demand.

GreenLancer is here to help installers nationwide with their residential and commercial solar projects. We offer a variety of solar design and engineering services that have helped more than 5,000 solar installers complete successful projects.

Sign up for free and shop our network of design and engineering specialists to streamline and scale your solar installation efforts.

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