How Much Do Solar Panels Cost in New Jersey? (2023)

New Jersey is one of the best states for solar energy. According to the Solar Energy Information Association (SEIA), it's ranked eighth in the United States for solar production. Installing a solar panel system can be expensive, though, and you’re likely wondering how much such a big project will cost.

We at the Guides Home Team have researched the the best solar companies in the United States and calculated the average cost of solar panels in New Jersey. This guide also covers cost-reducing solar incentives available in the Garden State.

Solar power systems require a large initial investment, with system size being one of the biggest determining costs. Most New Jersey homeowners require a 5 kilowatt (kW) system at an average of $2.75* per watt. This amounts to $13,750 or $9,625 after claiming the 30% federal tax credit. The larger your system, the higher your cost.

Here's a breakdown of solar panel cost by system size:

*Cost figure is based on averages from various sources.

Numerous factors impact solar panel costs beyond system size. Here are some other key aspects to consider:

Though installing a solar power system has a high initial investment, there are several federal and state tax incentives that can reduce costs. You’ll also save money on your energy bills long term; solar panels typically pay for themselves within five to seven years.

Garden State residents are eligible for the following solar incentives:

The federal solar tax credit gives homeowners a tax deduction equal to 30% of their solar installation costs. This rate will drop to 26% in 2033.

You must be a U.S. homeowner and own your solar panels to claim the federal tax credit. This applies to solar owners who purchased their systems up-front or took out a loan; customers who lease or have a power purchase agreement (PPA) are disqualified. To claim the credit, you must file IRS Form 5695 as part of your tax return. You can find more information about the requirements for the tax credit on the IRS website.

New Jersey is one of the many states with a net-metering program, which allows you to sell excess energy generated by your system back to the grid. You receive credits on your future electric bills for each kilowatt-hour (kWh) produced.

These programs vary by utility provider. The website for New Jersey's Clean Energy program includes guidelines for individual utility providers as well as more general information about New Jersey's net-metering program.

Solar systems increase your property value, but homeowners in the Garden State don't need to pay additional taxes, thanks to the state's solar property tax exemption.

New Jersey solar owners must apply for a certificate from their local property assessor. This certificate will reduce the taxable property to your home's value without the renewable energy system.

Equipment purchased for your solar power system is exempt from New Jersey's 6.625% sales tax. This incentive is available to all taxpayers and includes passive solar equipment, such as a sunspace or solar greenhouse.

Fill out this form from the state of New Jersey and submit it to the seller in lieu of paying sales tax. Get additional information from the New Jersey Sales Tax Exemption Administration.

This program is the successor to the popular solar renewable energy certificate (SREC) program. Under SuSI, or SREC-II, you generate one credit for each megawatt-hour (MWh) of energy your system produces. You earn $90 for each SREC-II credit and can sell your credits for additional income.

Residential solar owners must fill out a registration packet for the Administratively Determined Incentive (ADI) program. Applicants are selected on a first-come, first-serve basis.

According to SEIA, there are more than 200 solar installers in New Jersey. To help you narrow down your list of options, we’ve provided our top three recommendations for solar companies below.

Provider

Avg. Cost of a 10-kW System

Compare Quotes

SunPower

$15,000–$20,000+

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Sunrun

$15,000–$20,000

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ADT Solar

$15,000–$20,000

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Palmetto Solar

$15,000–$20,000

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Momentum Solar

$20,000–$25,000

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Solar panels are a big investment but come with an equally big payoff. They can save you money on your electric bills, allow you to generate passive income through net metering and increase your home's resale value.

Ensure your home is suited for solar power before setting up an installation. We also recommend requesting at least three quotes from different solar companies before making your decision.

Yes, solar panels can be worth it in New Jersey if your home is suited for solar power. The state gets plenty of sunshine and has excellent incentives to reduce installation costs.

Installing solar panels in New Jersey costs an average of $2.75* per watt. This amounts to $13,750 for a typical 5 kilowatt (kW) system or $9,625 after claiming the 30% federal tax credit.

The number of panels you need to power your house depends on your home's size and energy needs. A 1,500-square-foot house typically requires 15 to 18 panels.

We closely evaluated seven crucial factors according to our solar panel installation company methodology to rank the best providers in the industry. Based on a 100-point scale, we came up with each provider's score out of five stars. Here's how we assessed each company:

Tamara Jude is a writer specializing in solar energy and home improvement content. She has a background in journalism and an enthusiasm for research, with more than six years of experience producing and writing content. In her spare time, she enjoys traveling, attending concerts and playing video games.

Dana Getz is a seasoned editor with nearly a decade of experience writing and editing content. She has a background in journalism and worked as a fact-checker for prestigious magazines such as New York and Chicago. She holds a journalism and marketing degree from Northwestern University and has worked across numerous categories within the home services space.

Karsten Neumeister is an experienced energy professional with subject-matter expertise in energy policy and the solar and retail energy industries. He is currently the Communications Manager for the Retail Energy Advancement League and has prior experience writing and editing content for EcoWatch. Before EcoWatch, Karsten worked for Solar Alternatives, curating content, advocating for local renewable energy policy and assisting the solar engineering and installation teams. Throughout his career, his work has been featured on various outlets including NPR, SEIA, Bankrate, PV Mag and the World Economic Forum.