How Much Do Solar Panels Cost in New Jersey? (2024)

Every home is unique and will need a different-sized solar system. The primary factor in deciding the size of a system is your home’s daily or monthly energy consumption. In some cases, factors like roof orientation and pitch may affect the size. Below is a table that outlines system costs based on various sizes in New Jersey.

*We determined system costs based on data obtained from Sunpower

The cost of solar panels in New Jersey depends on several factors, including:

• System size and complexity: System size affects the cost of a solar panel system the most. Size depends on your energy needs, which the installer calculates based on your previous energy bills. Homes with a higher energy consumption will need larger systems, which will naturally cost more. The type and complexity of your system installation will also affect price. For example, companies price ground-mounted systems differently than roof-mounted arrays.
• Type and quality of equipment: Like any other home upgrade, the type, quality and features of the equipment affect the overall price. Solar panels with high-efficiency ratings, innovative technology and aesthetic designs are more expensive than standard options. Similarly, microinverters and lithium batteries are more expensive than string inverters and lead-acid batteries, respectively. However, high system performance results in higher savings, which can justify the added cost of higher-quality equipment.
• Your location and choice of installer: Your location also affects solar system pricing. Remote locations may require more logistical expenses, resulting in higher system prices. Counties with more complex formalities related to solar contracting may also add to system costs. The cost of a system will also depend on your choice of installer. Some installers, especially local companies, can have more competitive pricing.
• Climate: The amount of sunlight received varies by location. New Jersey has slightly lower solar potential than states like Arizona or California. Therefore, homes may need a larger system, which costs more.
• Available solar incentives: Solar incentives can slash the price of a solar system by a significant margin. In New Jersey, homeowners can benefit not only from the 30% federal tax credit but also from the state’s sales and property tax exemptions and a solar renewable energy certificate (SREC) program.

If you are looking to save money on a solar installation in New Jersey, you can take advantage of the following incentives.

Claim Federal and State Incentives

The federal and state solar incentives available in New Jersey can help homeowners significantly lower their system’s price tag. For instance, considering the above-mentioned average price of $19,175, homeowners can save about $5,752 by claiming the federal solar tax credit.

Other incentives, such as the Successor Solar Incentive (SuSI) Program, can offer a rebate of $85 for every $1,000 kWh of energy generated. The state’s sales and property tax exemptions can also lead to savings of a few hundred dollars.

Enroll in Net Metering

Net metering is a billing mechanism that measures incoming and outgoing electricity from a home solar system and pays the homeowner for supplying excess energy to the grid. In New Jersey, net metering allows homeowners to use solar and grid power flexibly and offers energy credits for every kilowatt-hour of energy supplied into the grid.

To enroll in net metering, homeowners must apply for a system interconnection and have a bidirectional meter installed. Most installers in New Jersey handle the net metering application on behalf of customers.

Compare Quotes from Multiple Installers

The lower the cost of a system, the greater the savings you can achieve over time. With over 250 solar installers operating in New Jersey, homeowners can expect a wide range of solar pricing throughout the state. Different installers in New Jersey will offer different system pricing.

Large, national installers may offer lower prices thanks to the benefit of scale, but experienced companies like SunPower may charge more due to equipment quality. Some smaller, local installers may also offer competitive pricing to boost market presence.

For these reasons, it is important to request quotes from multiple providers and compare offers thoroughly based on cost, equipment quality and warranties.

Improve Your Home’s Energy Efficiency

Solar power is a great way to reduce your energy bills, but considering your existing energy requirements can result in even greater savings. A home that already has lower electricity bills will need a smaller solar panel system, thus saving on its purchase cost. But you can see even more energy savings by boosting your home’s energy efficiency overall, which you can achieve by using energy-saving appliances, improving insulation and more.

If you are interested in implementing energy-efficient measures, look for solar companies that offer whole-home audits and other services.

Despite their ability to save you thousands in energy bills, solar panels can carry a sizable price tag upfront. Thankfully, many companies offer a variety of payment options to allow a wider spectrum of homeowners to purchase solar power systems.

Based on our October 2023 survey of a thousand homeowners with solar panels nationwide, cash purchase is the most widely used option in New Jersey. However, more than half of solar buyers turn to alternative options like solar loans and leases. Some customers also chose power purchase agreements (PPA), which involve payments based on the system’s performance.

Below are statistics on how New Jersey residents pay for their solar panels, based on our survey data.

Each solar financing method has pros and cons. While there is no single best option that applies to everyone, homeowners should carefully analyze the benefits and drawbacks of all payment options. A cash purchase, for example, yields the highest savings and makes the homeowner eligible for tax credits, but costs the most upfront. If you have the budget for it, we recommend purchasing a system in cash.

However, a solar loan is a good alternative option to retain ownership of the system and enjoy the tax credit while avoiding an upfront expense. While solar leases and PPAs can be beneficial for those who want a $0-down, easy-to-pay system, these options offer the lowest return in the long run and do not result in system ownership. You also cannot claim certain solar incentives, which is why we do not typically recommend a lease or PPA.

The average New Jersey household pays 18.02 cents for each kilowatt-hour of energy used. A 6.5 kW system will generate about 7,800 kWh of clean energy every year, based on the state’s solar potential. This means a household could save about $1,405 in annual energy bills.

Based on the state’s average pricing, the above system would cost $19,175, which drops to $13,422 after the tax credit. Considering the yearly savings mentioned above, a solar system in New Jersey would have a payback period of 9.5 years. If you factor in protection against rising power bills and other benefits of solar, such as increased home value and climate impact, going solar may seem even more lucrative.

Keep in mind that the above calculations consider a cash purchase. A solar loan will have added expenses, such as interest over time and processing fees. Similarly, a lease or PPA will tie you into a 20 or 25-year contract and you will never own the system. While there are short-term benefits to leasing a system, the cumulative amount of money you will spend is much greater than with a cash purchase or loan, leading to significantly lower savings over time.