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New Jersey has one of the strongest net metering policies in the nation. Every kWh your solar produces offsets a full retail-rate kWh on your bill.
New Jersey offers full 1:1 retail-rate net metering credits — every kWh your solar system produces offsets a kWh you would otherwise buy at ~$0.26/kWh. Monthly excess credits roll over. The annual true-up pays remaining excess at wholesale (~$0.03-$0.05/kWh). Systems up to 5 MW are eligible. All four NJ investor-owned utilities (PSE&G, JCP&L, ACE, RECO) participate. Combined with SREC-II income, a typical 8 kW system generates ~$3,296/year in total value.
Net metering turns your roof into a personal power plant. The grid acts as a free virtual battery, storing your excess energy and giving it back when you need it.
Every kWh exported to the grid earns a credit at the full retail electricity rate (~$0.26/kWh). No discount, no reduced rate — dollar-for-dollar value.
Excess credits roll over from month to month automatically. Spring and summer overproduction banks against winter bills when production is lower.
At the end of your annual billing cycle, remaining excess credits are paid out at wholesale rate (~$0.03-$0.05/kWh). Size your system to minimize annual excess.
NJ allows net metering for systems up to 5 MW — far more than any home needs. No separate residential size cap. Most homes install 6-12 kW.
PSE&G, JCP&L, ACE, and RECO all provide identical 1:1 credits. Interconnection timelines and application processes vary slightly by utility.
Battery storage can be paired with net metering. Store excess solar for self-consumption during peak hours or as emergency backup during outages.
Here is how net metering plays out over a typical year with an 8 kW system in New Jersey. Notice how spring/summer overproduction offsets higher winter bills.
| Month | Production (kWh) | Usage (kWh) | Excess Credit (kWh) | Net Cost |
|---|---|---|---|---|
| January | 480 | 1,000 | — | ~$135 |
| February | 540 | 950 | — | ~$107 |
| March | 720 | 850 | — | ~$34 |
| April | 880 | 750 | +130 | $0 +credit |
| May | 1,020 | 700 | +320 | $0 +credit |
| June | 1,100 | 900 | +200 | $0 +credit |
| July | 1,080 | 1,100 | — | ~$5 (uses banked) |
| August | 1,000 | 1,050 | — | ~$13 (uses banked) |
| September | 840 | 800 | +40 | $0 +credit |
| October | 660 | 750 | — | ~$23 |
| November | 480 | 850 | — | ~$96 |
| December | 400 | 900 | — | ~$130 |
| Annual Total | 9,200 | 10,600 | ~$2,496 saved | |
Key Takeaway
Overproduction in April-June and September generates credits that roll over to cover higher-consumption months. Proper system sizing is crucial — match annual production to annual consumption to maximize value and minimize excess paid out at wholesale rates.
All four NJ utilities offer the same 1:1 credit, but interconnection timelines and application processes differ.
| Utility | Territory | Credit Rate | Rollover | True-Up | Interconnection |
|---|---|---|---|---|---|
PSE&G 2.3 million customers | North & Central NJ | 1:1 retail rate | Monthly | Annual (April) | 2-4 weeks |
JCP&L 1.1 million customers | Central & Western NJ | 1:1 retail rate | Monthly | Annual (June) | 3-6 weeks |
ACE 560,000 customers | South Jersey | 1:1 retail rate | Monthly | Annual (June) | 2-4 weeks |
RECO 73,000 customers | Bergen & Passaic counties (small area) | 1:1 retail rate | Monthly | Annual | 3-5 weeks |
Public Service Electric & Gas · 2.3 million customers
North & Central NJ
Monthly
Annual (April)
2-4 weeks
Largest NJ utility. Streamlined online interconnection process.
Jersey Central Power & Light (FirstEnergy) · 1.1 million customers
Central & Western NJ
Monthly
Annual (June)
3-6 weeks
Covers large suburban territory. Interconnection can be slower for larger systems.
Atlantic City Electric (Exelon) · 560,000 customers
South Jersey
Monthly
Annual (June)
2-4 weeks
Shore communities especially favorable for solar. Fast interconnection.
Rockland Electric Company (Orange & Rockland) · 73,000 customers
Bergen & Passaic counties (small area)
Monthly
Annual
3-5 weeks
Smallest NJ utility. Higher rates can mean greater net metering value.
Real financial breakdown for a typical 8 kW residential system in New Jersey.
Note: The federal residential solar tax credit (Section 25D) expired December 31, 2025. There are $0 in federal tax credits for homeowner cash/loan solar purchases. However, systems installed through third-party financing (PPA/lease) may still benefit from the commercial ITC (Section 48/48E) claimed by the system owner.
* Simplified projection. Actual values vary with rate changes, panel degradation (~0.5%/year), and policy changes. Does not account for electricity rate inflation, which would increase net metering value over time.
The New Jersey Board of Public Utilities (NJ BPU) has been evaluating net metering reforms as part of its transition planning for a successor net metering program. Several states (California, Nevada, Hawaii) have already significantly reduced net metering credits.
Potential changes being discussed include: export rates based on value-of-solar methodologies (lower than retail), grid access charges for solar customers, or battery storage requirements. Nothing has been enacted yet.
From application to Permission to Operate (PTO), here is what it takes to connect your solar system to the NJ grid.
Your installer designs the system, obtains permits, and you sign the installation contract.
Installer submits the interconnection application to your utility with system specs, one-line diagram, and site plan.
Utility reviews application. Systems under 25 kW on residential service typically get expedited review.
Panels, inverter, and electrical connections installed. Local electrical inspection scheduled.
Municipal electrical inspector verifies installation meets NEC and local code requirements.
Utility installs a bidirectional net meter that tracks both import and export. No cost to homeowner.
Utility issues PTO letter. Your system is officially approved to generate and export power. Net metering begins.
Typical Total Timeline
The complete process from contract signing to Permission to Operate typically takes 4-8 weeks for residential systems under 25 kW. Larger systems may require an additional engineering study that adds 2-4 weeks.
If you cannot install rooftop solar (renters, condo owners, excessive shading, historic properties), New Jersey's Community Solar Energy Program (CSEP) offers an alternative path to solar savings.
Bottom line: If you can install rooftop solar, net metering offers significantly better value. Community solar credits are lower than 1:1 net metering credits. However, community solar is an excellent option for those who cannot install panels — some savings is always better than no savings.
Net metering is just one piece of the puzzle. Here is how all NJ solar incentives stack together in 2026.
Full retail-rate credits for every kWh exported to grid
Renewable energy certificates earned per 1,000 kWh produced
Solar panels do not increase your property tax assessment
Solar equipment and labor exempt from NJ sales tax
State incentive for residential battery storage paired with solar
Expired December 31, 2025. $0 federal tax credit for homeowner cash/loan solar purchases.
Answers to the most common questions about net metering in New Jersey.
Net metering in New Jersey allows solar system owners to receive a 1:1 retail-rate credit for every kilowatt-hour (kWh) of electricity they send back to the grid. If your system produces more than you use in a given month, the excess is credited at the full retail rate (~$0.26/kWh) and rolls over to the next month. At the annual true-up, any remaining excess is paid out at the wholesale rate (~$0.03-$0.05/kWh).
NJ net metering credits are worth the full retail rate of electricity, approximately $0.26/kWh in 2026. For a typical 8 kW residential system producing 9,600 kWh/year, that translates to approximately $2,500/year in net metering value. Combined with SREC-II income, total annual value can reach $3,300 or more.
Yes. Excess credits roll over from month to month at full retail value. This is important because solar systems typically overproduce in spring and summer, banking credits that offset higher consumption in winter months. Credits accumulate indefinitely within the annual billing cycle.
At the annual true-up (the date varies by utility), any remaining excess credits are paid out at the wholesale rate, which is approximately $0.03-$0.05/kWh in NJ. This is significantly less than the retail rate, so it is best to size your system to match your annual consumption rather than significantly oversizing.
New Jersey allows net metering for systems up to 5 MW (megawatts) of capacity. For residential customers, there is no separate capacity cap beyond the 5 MW limit. However, utilities may require an engineering study for systems larger than 25 kW on residential service. Most homes install 6-12 kW.
Yes. All four of New Jersey's investor-owned electric utilities participate in net metering: PSE&G, JCP&L (Jersey Central Power & Light), ACE (Atlantic City Electric), and RECO (Rockland Electric). All provide 1:1 retail-rate credits with monthly rollover. Municipal utilities and co-ops may have different policies.
Yes. New Jersey allows net metering for both customer-owned and third-party-owned solar systems (PPAs and leases). The system must be located on the customer's property and interconnected behind the customer's meter. The net metering credits flow to the utility account holder.
There have been ongoing discussions about restructuring NJ net metering, including potential successor tariff proposals. However, systems installed under the current policy are expected to be grandfathered under existing rates for 15-20 years. Installing now locks in current 1:1 retail-rate credits before any policy changes take effect.
Net metering and SREC-II are separate, stackable incentives. Net metering credits offset your electric bill based on the electricity your system sends to the grid. SREC-II certificates are earned for every 1,000 kWh your system produces (regardless of whether that energy is used on-site or exported). You receive both simultaneously, which is why NJ solar economics remain strong.
Community solar (through the NJ CSEP program) allows renters, condo owners, and others who cannot install rooftop solar to subscribe to a shared solar project and receive credits on their utility bill. Community solar subscribers typically receive credits at a discount to the retail rate (e.g., 10-20% savings). It is an alternative for those who cannot directly net meter.
The main equipment requirement is a bidirectional (net) meter, which your utility installs at no cost to you. Your solar system must also have a utility-approved inverter with anti-islanding protection (all modern grid-tied inverters include this). No additional equipment is required for standard net metering.
The total timeline from interconnection application to Permission to Operate (PTO) is typically 4-8 weeks. Systems under 25 kW on residential service receive expedited review (2-4 weeks for utility approval). The meter swap usually happens within 1-2 weeks after local inspection passes. PSE&G and ACE tend to be the fastest.
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With net metering, SREC-II, and tax exemptions, NJ solar remains one of the strongest investments in the country. Get your personalized estimate today.
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