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New Jersey has the highest solar adoption rate in the Northeast — and the most aggressive sales tactics to match. The federal ITC is dead. ADI has replaced SRECs. Some companies have not updated their pitch. Others are deliberately misleading homeowners. Here is how to protect yourself.
1,200+
NJ Solar Complaints (2025)
$8,500
Average Scam Loss
400+
Door-to-Door Reports
65%
ITC Misrepresentations
Section 25D of the Internal Revenue Code was eliminated by the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. It expired December 31, 2025. Homeowners who purchase solar with cash or a loan receive zero federal tax credits. Section 48/48E remains available for third-party owners (PPA/lease companies) on projects beginning construction before July 4, 2026, but the homeowner does not claim that credit.
New Jersey is one of the top five solar markets in the United States. High electricity rates (~$0.26/kWh), the ADI incentive program ($85.00/MWh for 15 years), full-retail net metering, sales tax exemption (6.625%), and a property tax exemption on solar value make the Garden State a strong solar investment even without the federal tax credit.
But NJ’s solar success has attracted aggressive sales organizations. The state’s dense suburban neighborhoods, high median income, and high utility costs make it a prime target for door-to-door solar sales teams — some legitimate, many not. The elimination of Section 25D has created a dangerous information gap that dishonest companies exploit.
The SREC → SREC-II → ADI transition has added another layer of confusion. Some companies still reference SREC prices from 2020 ($200-300/MWh) when the current ADI rate is $85.00/MWh. Others inflate ADI income projections to compress payback periods on paper.
This guide covers the 10 biggest red flags in the 2026 New Jersey solar market, NJ-specific scam patterns, how to verify any company’s credentials, and a complete contract checklist — plus an interactive Red Flag Checker tool.
The #1 red flag in 2026: any NJ solar company that advertises a 30% federal tax credit for homeowners. The residential solar ITC (Section 25D) expired December 31, 2025. It is $0 for homeowners purchasing with cash or a loan. If a company includes this in your savings estimate, they are inflating your projected savings by thousands of dollars.
Other NJ-specific red flags include: inflated ADI/SREC income projections (the correct rate is $85.00/MWh), claiming to be “approved by PSE&G,” door-to-door pressure with fake deadlines, hidden dealer fees in loan terms, and operating without a valid NJ electrical contractor license.
The only exception: PPA and lease providers can legitimately reference Section 48/48E, because the third-party owner of the system claims that credit. But if a company tells you, the homeowner, that you will receive 30% off your taxes, they are wrong.
These are the warning signs we see most often in the 2026 New Jersey solar market. If you encounter any of these, proceed with extreme caution.
The federal residential solar ITC (Section 25D) expired December 31, 2025. It is gone. $0 for homeowners. Any company in New Jersey still advertising a 30% credit is either dangerously uninformed or intentionally deceiving you.
Section 25D of the Internal Revenue Code was eliminated by the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. For any solar system purchased by a homeowner with cash or a loan in 2026, the federal tax credit is $0.
New Jersey has one of the highest solar adoption rates in the Northeast, which means more companies competing for your business — and more temptation to inflate savings projections with a tax credit that no longer exists.
The exception: PPA and lease providers can legitimately reference Section 48/48E, because the third-party system owner (not you) claims that credit. But if a company tells YOU that YOU will receive 30% off your taxes, they are wrong.
“Under which section of the tax code does the residential solar credit exist in 2026?”
Correct answer: It doesn't. Section 25D expired December 31, 2025. If they can't answer this, walk away.
"Sign today or lose this price." "I can only hold this rate for 24 hours." "This special program ends Friday." New Jersey suburbs are heavily targeted by door-to-door solar sales teams using manufactured urgency to prevent you from comparison shopping.
NJ's ADI rates are set annually by the NJ Board of Public Utilities. They are not expiring this week. The current rate ($85.00/MWh) is locked for the energy year. There is no legitimate reason to rush your decision.
Under NJ law (Admin Code 13:45A-16), you have a 3-business-day right to cancel any contract signed during a door-to-door sale. If a salesperson asks you to waive this right or sign a waiver, that is likely illegal.
Communities across northern NJ (Bergen, Essex, Passaic counties) and the Jersey Shore are particularly targeted by door-to-door teams. A legitimate company will give you a written quote and encourage you to compare.
“What specific incentive is expiring, and can you show me the NJ BPU announcement?”
Correct answer: There is no homeowner-facing NJ solar incentive with a near-term expiration. ADI rates are annual. Net metering is protected by NJ statute.
"Get free solar panels for your home!" This usually means a lease or PPA — you pay monthly for 20-25 years and never own the system. It is not free. Legitimate companies disclose the structure upfront.
In a solar lease or PPA, the third-party company owns your panels. You pay them a monthly fee or per-kWh rate. Over 20-25 years, you will pay $20,000-$40,000+ for a system you never own.
The "free" pitch works in NJ because high electricity rates ($0.26/kWh) mean even a lease can save money vs. your utility bill. But the savings are far less than owning your system outright.
If a company describes solar as "free," ask: "Is this a lease, PPA, or cash purchase?" If they cannot clearly explain the difference, or if they call a lease "free solar," that is deceptive.
“Is this a purchase (cash or loan), a lease, or a PPA? Who owns the system?”
Correct answer: They should clearly state the ownership structure. In a lease/PPA, they own it. In a purchase, you own it. There is no "free" option.
Some NJ solar companies inflate SREC/ADI income projections to make the payback period look shorter. The published ADI rate is $85.00/MWh (EY2025-26). If a company promises significantly more, they are misleading you.
The NJ ADI program (successor to SREC-II) pays $85.00/MWh for the current energy year. These rates are locked for 15 years from your system's registration date.
A typical 10 kW NJ system produces about 12,000 kWh/year (12 MWh). At $85.00/MWh, that is approximately $1,030/year in ADI income — about $86/month. If a company projects $150-200+/month, they are inflating numbers.
Some companies use outdated SREC prices (which were $200-300/MWh) in their projections. SREC-II transitioned to ADI in 2025. The rate is set by the BPU, not the open market.
“What ADI rate are you using in my ROI projection, and where is that rate published?”
Correct answer: The correct answer is $85.00/MWh (EY2025-26) or $85.00/MWh, published by the NJ BPU. If they cite higher numbers, ask for the source.
Creating false urgency around NJ incentives that have no imminent expiration. ADI is ongoing. Net metering is protected by statute. NJ's sales and property tax exemptions have no sunset date.
Section 48/48E does have a July 4, 2026 deadline for projects to begin construction, but that applies to the third-party system owner on a lease or PPA, not to your cash or loan purchase.
ADI rates change annually, but they are increasing, not decreasing ($85.00 to $85.00/MWh). There is no "act now or lose your ADI" scenario for homeowners.
NJ net metering (full retail credit) is established by the NJ BPU and protected under NJ Admin Code 14:8-4. It is not expiring soon. Any salesperson who claims otherwise should provide the specific regulation and date.
“What specific NJ incentive is expiring, on what date, and can you show me the BPU order?”
Correct answer: No NJ homeowner-facing solar incentive has a near-term expiration. If they cannot cite a specific BPU order with a date, the urgency is manufactured.
Some solar loans include 25-30% dealer fees rolled into the principal. A $30,000 NJ system becomes a $39,000+ loan. Always ask for the cash price AND the financed price separately.
Dealer fees (also called "origination fees" or "channel fees") are costs the solar company pays to the lender, which get added to your loan balance. On a $30,000 system, a 28% dealer fee adds $8,400 to your loan.
The result: your monthly payment is higher than it should be, and you pay thousands more in interest. The company benefits because the dealer fee is essentially their profit margin, pre-paid by the lender.
To protect yourself, always ask for the cash price separately. Compare financing from the installer's preferred lender against a NJ credit union or local bank loan.
“What is the cash price of my system, and what is the total amount financed on the loan? Are there any dealer fees?”
Correct answer: The cash price and financed amount should be close. If the financed amount is 20-30% higher, dealer fees are embedded. Ask for the fee percentage in writing.
Door-to-door salespeople in NJ frequently claim to be "approved by PSE&G," "working with JCP&L," or "sent by your utility company." PSE&G, JCP&L, and ACE do NOT endorse, approve, or send solar companies to your home.
This is one of the most common door-to-door deception tactics in New Jersey. Salespeople wear polo shirts with utility-like branding and claim they are there to help you "take advantage of your utility's solar program."
PSE&G, JCP&L (FirstEnergy), and ACE (Atlantic City Electric) are required to interconnect your solar system and process net metering applications. That is a regulatory obligation, not an endorsement of any specific installer.
If a salesperson claims utility affiliation, call your utility directly to verify. PSE&G customer service: 1-800-436-7734. JCP&L: 1-800-662-3115. ACE: 1-800-642-3780.
“Can you provide documentation from PSE&G/JCP&L/ACE confirming your approval or partnership?”
Correct answer: They cannot, because no such approval exists. Utilities process interconnection applications for all qualified solar systems. They do not endorse specific companies.
The company that sells you the system is not always the company that installs it. NJ has seen a rise in sales-only organizations that subcontract installation to different crews, creating warranty and accountability gaps.
Ask directly: "Will your own W-2 employees install my system, or will you subcontract the installation?" If they subcontract, ask for the subcontractor's NJ license number and insurance certificate.
Warranty issues arise when the sales company and installer are different entities. If the sales company closes (common in the solar industry), the installer may not honor the sales company's warranty commitments.
NJ saw multiple solar company closures in 2024-2025 following the ITC changes. Homeowners with subcontracted installations found themselves with no warranty support when the sales company shut down.
“Will your own employees install my system, or do you subcontract? If subcontracted, what is the installer's NJ license number?”
Correct answer: Ideally, the company uses its own licensed crews. If they subcontract, they should provide the sub's NJ license number and confirm warranty responsibility in writing.
A legitimate NJ solar installer evaluates your roof's condition, age, orientation, shading, and structural capacity before providing a final quote. A quote based only on Google satellite imagery is not reliable.
New Jersey's mix of older homes (especially in North Jersey) and coastal properties (Shore communities) requires careful structural evaluation. Older roofs may need reinforcement or replacement before solar installation.
Salt air corrosion on Shore homes affects panel mounting hardware. A reputable installer will specify marine-grade racking for coastal installations and factor that cost into the quote.
If a company provides a final price without visiting your property, they are likely adding a contingency markup to cover unexpected costs — or they will hit you with change orders after signing.
“Will you perform an in-person roof and structural assessment before I sign a contract?”
Correct answer: Yes, a pre-contract site assessment is standard practice. At minimum, they should verify roof condition, measure structural capacity, assess shading, and check electrical panel compatibility.
NJ municipalities require building and electrical permits for every solar installation. Skipping permits violates NJ law, voids warranties, creates fire safety hazards, and will cause serious problems when selling your home.
Every NJ municipality requires a building permit and electrical permit for solar installations. The Uniform Construction Code (N.J.A.C. 5:23) governs all solar permit requirements. No exceptions.
NJ requires solar installers to hold a valid electrical contractor license issued by the NJ Board of Examiners of Electrical Contractors. Ask for the license number and verify it before proceeding.
An unpermitted solar installation will fail a home inspection, complicate real estate transactions, and may void your homeowner's insurance coverage. The cost to retroactively permit and correct an improper installation typically exceeds the cost of doing it right the first time.
“What is your NJ electrical contractor license number, and will you pull all required permits with my municipality?”
Correct answer: They should provide the license number immediately and confirm that all building and electrical permits are included in their scope of work and pricing.
These deceptive tactics are especially common in the New Jersey solar market due to the state’s high solar adoption, dense suburbs, and complex incentive history.
Companies exploit the SREC → SREC-II → ADI transition to confuse homeowners. They reference old SREC prices ($200-300/MWh) when the current ADI rate is $85.00/MWh. Some claim "your SRECs are worth $3,000+/year" when a typical 10 kW system earns ~$1,030/year.
Bergen, Essex, Passaic, Monmouth, and Ocean counties are prime targets for door-to-door solar teams. They exploit NJ's high utility rates ($0.26/kWh) and dense suburban neighborhoods. Red flag: any uninvited salesperson who claims to be "from your utility" or "from the state."
Salespeople wear utility-branded clothing and claim to represent or be approved by PSE&G, JCP&L, or ACE. NJ utilities do NOT approve, endorse, or partner with specific solar companies. Interconnection is a regulatory requirement, not an endorsement.
Some companies claim you "qualified for a special NJ state program" that gives you free or deeply discounted solar. NJ has no such program. ADI is available to all NJ solar installations — it is not a special qualification. There is no state rebate for residential solar.
Not every company is dishonest. Here are the hallmarks of a trustworthy New Jersey solar installer.
Shows the real cost of your system without a 30% tax credit line item. Explains clearly that the residential ITC expired in 2025.
Includes ADI payments at the correct BPU-published rate ($85.00/MWh) in your ROI projection for the full 15-year term.
Offers cash, solar loan (with transparent dealer fee disclosure), PPA/lease, and explains the pros and cons of each option honestly.
Provides their NJ license number upfront. Licensed, insured, and bonded in New Jersey. Verifiable through the NJ Division of Consumer Affairs.
Offers a comprehensive 25-year warranty on panels, inverters, and workmanship. Backs it with a local NJ presence, not just a corporate HQ in another state.
Handles all municipal permitting, utility interconnection, ADI registration, and inspections. You should not have to manage NJ paperwork.
Dealer fees are one of the least understood aspects of solar financing in 2026. When a solar company partners with a lending institution, the lender offers the company a choice of loan products. Lower-APR loans come with higher dealer fees. The company selects the loan product, and the dealer fee is added to your loan principal.
For example, a company might offer you a “1.49% APR solar loan.” Sounds great. But the dealer fee might be 30%. On a $30,000 NJ system, you are actually financing $39,000. Your monthly payment and total interest cost reflect that $39,000 balance, not the $30,000 value of your system.
The math is revealing: at 1.49% APR on $39,000 over 25 years, you pay $46,410 in total. At 6.99% APR on $30,000 from a NJ credit union over 15 years, you pay $48,610 in total but pay it off 10 years sooner. The “low APR” loan often costs you more in practice when you factor in the time value of money.
| Loan Type | APR | Dealer Fee | Amount Financed | Term | Total Cost |
|---|---|---|---|---|---|
| Installer loan (low APR) | 1.49% | 30% | $39,000 | 25 yr | $46,410 |
| Installer loan (mid APR) | 4.99% | 15% | $34,500 | 20 yr | $54,530 |
| NJ credit union loan | 6.99% | 0% | $30,000 | 15 yr | $48,610 |
| Cash purchase | N/A | 0% | $30,000 | N/A | $30,000 |
Based on a $30,000 NJ system. Actual rates vary by lender and credit score. Payments do not include ADI income or net metering savings.
Trust but verify. These free resources let you independently confirm everything a New Jersey solar company tells you.
Verify contractor licenses and file complaints
Visit resource →ADI program information and solar installer registration
Visit resource →File a complaint about deceptive solar sales practices
Visit resource →Check company ratings, reviews, and complaint history
Visit resource →Before signing anything, make sure the contract covers every item on this list. Missing items are a red flag — especially ADI assignment and permit responsibility.
Solar leases and PPAs are particularly relevant in New Jersey because of the high electricity rates and the ITC situation. Here is the honest breakdown.
Bottom line: A solar PPA or lease is not inherently a red flag in NJ. It is a legitimate financing structure where the third-party owner benefits from the commercial ITC and passes savings to you. The red flag is when a company confuses you about who receives the tax credit. If they say you will claim 30% on your taxes through a lease, that is false. The leasing company claims it.
Here is what honest pricing looks like in NJ — with no phantom tax credits inflating the savings.
Average Cost per Watt
$2.75 - $3.25/W
Installed, before incentives
Typical 10 kW System
$27,500 - $32,500
No federal tax credit
Payback Period
8 - 10 Years
With ADI + net metering
ADI (SREC-II Successor)
$85.00/MWh for 15 years
~$1,030/yr (10 kW)
Net Metering
Full retail rate credit
~$3,120/yr (10 kW)
Sales Tax Exemption
6.625% saved
~$1,990 one-time
Property Tax Exemption
Added value exempt
~$500-800/yr saved
Electricity Rate
~$0.26/kWh (and rising)
Higher rates = faster payback
ADI Rate Increase
$85.00/MWh
~$1,143/yr (10 kW, new installs)
New Jersey has strong consumer protection laws. If you encounter a dishonest solar company, these agencies can help.
Regulates solar installations, ADI program, net metering, and utility interconnection in New Jersey.
Phone: 609-913-6100
Handles consumer complaints, contractor license verification, and enforcement of the NJ Consumer Fraud Act.
Phone: 1-800-242-5846
Investigates fraud and deceptive business practices. File complaints about solar companies that misrepresent the federal tax credit.
Web: njoag.gov
NJ Consumer Fraud Act (N.J.S.A. 56:8-2)
Under NJ law, misrepresenting the federal tax credit to sell solar constitutes an “unconscionable commercial practice.” Homeowners who were deceived may be entitled to treble (3x) damages plus attorney fees. If a company told you that you would receive a 30% federal tax credit on a 2026 purchase, consult an attorney.
Had a consultation with a NJ solar company? Answer these questions to assess their trustworthiness. Your risk score updates in real time.
Answer each question based on your experience with a solar company. Your risk assessment updates in real time.
Did the company tell you that you will receive a 30% federal tax credit on your solar purchase?
Did they pressure you to sign today or within 24-48 hours, claiming a deadline or limited-time offer?
Did they describe the solar system as "free" without clearly explaining it is a lease or PPA?
Did they promise SREC or ADI income that seems unusually high (e.g., $200+/month for a residential system)?
Did they refuse to provide the cash price of the system, only showing financed pricing?
Were they unable to provide their NJ electrical contractor license number or NJ BPU registration?
Did they claim to be "approved by PSE&G" or "sent by your utility company"?
Did they say permits are not needed, or that they will handle everything "informally"?
Did they skip a structural or roof assessment before providing a final quote?
Is the company name on the contract different from the crew that will install the system?
Understanding the history helps you recognize when a NJ company is referencing outdated information versus deliberately misleading you.
2006-2019
Section 25D at 30%
The residential ITC was established at 30% with multiple extensions. This is the era most sales materials still reference.
2020-2022
Scheduled step-down to 26%
The ITC began its original phase-out schedule before the IRA intervened.
Aug 2022
IRA restores 30% through 2032
The Inflation Reduction Act extended the 30% residential ITC through 2032. Many NJ companies updated their marketing.
Jul 4, 2025
OBBBA signed into law
The One Big Beautiful Bill Act repealed the IRA's residential clean energy credits, including Section 25D.
Dec 31, 2025
Section 25D expires
The residential solar ITC officially expired. NJ homeowners purchasing with cash or loan receive $0 in federal tax credits.
Jul 4, 2026
Section 48/48E construction deadline
Third-party owners (PPA/lease companies) must begin construction before this date to claim the commercial ITC. Does not affect homeowner cash/loan purchases.
Print this list or save it on your phone. Ask every company every question. Compare the answers.
Does your quote include any federal residential tax credit?
Good: No. Section 25D expired December 31, 2025.
Red flag: Yes, you'll get 30% back.
Is ADI income included in my payback projection? At what rate?
Good: Yes, at $85.00/MWh (EY2025-26) for 15 years.
Red flag: We use SREC pricing / We project $200/month in SRECs.
What is the cash price of my system?
Good: Clear number, matches system size at $2.75-$3.25/W.
Red flag: We only offer financed pricing.
Are there dealer fees in the loan? What percentage?
Good: Yes, X%. Here is the breakdown.
Red flag: No / What are dealer fees? / Evasion.
What is your NJ electrical contractor license number?
Good: Provides number immediately. Verifiable on njconsumeraffairs.gov.
Red flag: We're licensed in [other state] / We're applying.
Can you provide five local NJ references?
Good: Yes, with names, towns, and permission to contact.
Red flag: We have reviews online / We're new to NJ.
Who handles permitting, interconnection, and ADI enrollment?
Good: We handle everything. It's included in the price.
Red flag: You'll need to handle some of that yourself.
Will your own employees install the system, or do you subcontract?
Good: Our W-2 crews install. Here is their NJ license.
Red flag: We use independent contractors / Can't say.
What happens if I want to cancel after signing?
Good: You have 3 business days (NJ law for door-to-door). Full refund of deposit.
Red flag: Non-refundable deposit / No cooling-off period.
What warranty coverage do you provide?
Good: 25-year panel, 25-year microinverter, 10-25 year workmanship.
Red flag: Vague answers / Only manufacturer warranty / No workmanship warranty.
Ask them: "Under which section of the Internal Revenue Code does the residential solar tax credit exist in 2026?" The correct answer is that it does not exist. Section 25D expired on December 31, 2025 under the OBBBA. Any company advertising a 30% residential tax credit in 2026 is either uninformed or deliberately misleading you. The only remaining federal solar credit is Section 48/48E for commercial and third-party system owners (PPA/lease providers), which the homeowner does not claim.
Yes. The residential solar investment tax credit (Section 25D) was eliminated by the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. It expired December 31, 2025. Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. Section 48/48E still exists for commercial and third-party ownership structures (PPAs and leases), but the credit goes to the system owner, not the homeowner.
Ask these five questions: (1) What is the cash price of my system without any federal tax credit? (2) Is ADI/SREC-II income included in your payback calculation, and at what rate? (3) What is your NJ electrical contractor license number? (4) Can you provide five local NJ references? (5) Do you handle all permitting, interconnection, and ADI enrollment? Any hesitation or evasion on these questions is a red flag.
New Jersey requires solar installers to hold an electrical contractor license. You can verify licenses through the NJ Division of Consumer Affairs at njconsumeraffairs.gov. Also check their NJ Board of Public Utilities (BPU) registration, Better Business Bureau ratings, and search the NJ Attorney General's consumer complaint database.
A legitimate NJ solar quote should include: (1) Cash price before any incentives. (2) System size in kW and estimated annual production in kWh. (3) Panel brand, model, and warranty details. (4) Inverter type and warranty. (5) Projected ADI income ($85.00/MWh for EY2025-26) over 15 years. (6) Net metering savings based on your utility rate (~$0.26/kWh). (7) Total payback period without any federal tax credit. (8) Financing terms with APR and total cost. If the quote shows a 30% ITC line item, the company is not being honest.
Yes, solar leases and PPAs are still legitimate in 2026. The third-party system owner can claim the Section 48/48E commercial ITC of up to 30% on projects beginning construction before July 4, 2026. The company passes some savings to you through a below-retail electricity rate. The key: you do not own the system, you do not receive ADI income directly, and you cannot claim any tax credits yourself. Legitimate lease/PPA companies will explain this clearly.
Solar panels in New Jersey cost $2.75 to $3.25 per watt installed in 2026. A typical 10 kW system costs $27,500 to $32,500. There is no federal residential tax credit to reduce these costs. NJ incentives include ADI payments ($85.00/MWh for 15 years.625%), and property tax exemption on the added home value.
ADI (Administratively Determined Incentive) is New Jersey's successor to SREC-II. It pays solar system owners $85.00 per megawatt-hour (EY2025-26), locked in for 15 years. A typical 10 kW system earns approximately $1,030/year from ADI. Any legitimate NJ installer must include ADI income in their ROI calculation because it is the primary state incentive. If your installer does not mention ADI or inflates ADI projections beyond the published rate, that is a red flag.
Yes. File a complaint with the NJ Division of Consumer Affairs at 1-800-242-5846 or online at njconsumeraffairs.gov. You can also report to the NJ Board of Public Utilities (609-913-6100) and the NJ Attorney General's office. If a company misrepresents the federal tax credit, that may constitute fraud under NJ Consumer Fraud Act (N.J.S.A. 56:8-2).
Yes, door-to-door solar sales are legal in NJ, but companies must comply with NJ's Home Repair Fraud Act and Door-to-Door Sales regulations. You have a 3-business-day right to cancel any contract signed during a door-to-door sale (NJ Admin Code 13:45A-16). If a salesperson pressures you to waive this right or sign immediately, that is both a red flag and likely illegal under NJ law.
Complete overview of solar in New Jersey after the ITC expiration.
Read guideHow the ADI program works, current rates, and enrollment process.
Read guideCity-by-city pricing breakdown with accurate 2026 incentive data.
Read guideCompare utility rates and understand their impact on solar ROI.
Read guideCompare all financing options with honest 2026 numbers for NJ.
Read guideIs solar still worth it in NJ without the federal ITC? Data says yes.
Read guideNo phantom tax credits. No inflated SREC projections. No hidden dealer fees. Just honest pricing with ADI income, net metering, and every NJ incentive calculated accurately.