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The federal residential tax credit is gone. Here are all the incentives that still exist in NJ, what solar actually costs, and whether it still makes financial sense — with real data, not marketing hype.
Important: The 30% federal solar tax credit (Section 25D) expired December 31, 2025.
Many websites still advertise this credit. Homeowners who buy solar with cash or a loan in 2026 receive $0 in federal tax credits. This guide reflects accurate 2026 incentives only. Learn what happened
NJ remains one of the best solar states in the country despite the expired 25D tax credit. SREC-II payments ($85.9/MWh for 15 years) generate ~$9,600 for a typical system. Combined with 1:1 net metering (~$0.26/kWh retail credit), 6.625% sales tax exemption (~$2,200 saved), 100% property tax exemption (huge with NJ's $9,500 average property tax), and community solar (CSEP), a typical system pays for itself in 7-9 years and saves $85,000+ over 25 years.
Avg. System Cost
$36K-$41K
13kW system
Payback Period
8 years
Cash purchase
25-Year Savings
$85,000+
vs. utility bills
SREC-II (15 years)
~$9,600
$85.9/MWh
The 30% residential tax credit is gone. Here is exactly what that means for NJ homeowners — and why NJ still works.
Key Insight for 2026
NJ still works because state incentives are strong. SREC-II, 1:1 net metering, and tax exemptions replace much of the lost ITC value. Lease and PPA options are more attractive than ever because the third-party system owner can still claim the 30% commercial ITC. More about solar without the tax credit
The federal credit is gone, but NJ has one of the strongest solar incentive stacks in the country. Here is every program you can use in 2026, and those you cannot.
$85.9/MWh for 15 years = ~$9,600 for 8kW
The Successor Solar Incentive (SuSI) / Administratively Determined Incentive (ADI) pays $85.9/MWh (EY2025-26) for residential net-metered systems. Payments are quarterly for 15 years. For a typical 13kW system producing ~14,700 kWh/year, that is approximately $765/year or $9,600+ over 15 years.
1:1 retail rate credit (~$0.26/kWh), monthly rollover, annual true-up
New Jersey offers true 1:1 net metering for systems up to 5 MW. Excess solar credits roll over monthly at the full retail rate. At annual true-up, remaining credits are paid out at the avoided-cost (wholesale) rate. PSE&G, JCP&L, ACE, and RECO all participate.
6.625% saved = ~$2,200 on a $33K system
All solar energy equipment and installation labor is exempt from NJ's 6.625% sales tax. On a $33,000 system, this saves approximately $2,200 that you never have to pay. Applied automatically at purchase.
100% exempt — solar adds $0 to your assessment
Solar installations are 100% exempt from NJ property tax. This is especially significant because NJ has the highest average property taxes in the United States (~$9,500/year). Without this exemption, a $38K solar system could add ~$850/year to your property tax bill.
10-40% bill savings, no rooftop needed, 51% LMI set-aside
The Community Solar Energy Program (CSEP) allows NJ residents to subscribe to a local solar farm and receive bill credits. No installation on your property. 750+ MW capacity (expanded May 2025). 51% of capacity reserved for low-to-moderate income households. Available through PSE&G, JCP&L, ACE, and RECO.
$0 — Expired December 31, 2025
Section 25D expired under the OBBBA (signed July 4, 2025). Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits in 2026. Third-party owned systems (lease/PPA) still qualify for 30% under Section 48/48E — the financing company claims the credit, not the homeowner.
Up to $8,000 — PENDING in NJ
The Home Energy Assessment Rebate (HEAR) program offers up to $8,000 for income-qualified households. New Jersey has NOT yet launched this program — it is still pending. Do not rely on HEAR in your 2026 solar planning.
| Incentive | Type | Estimated Value |
|---|---|---|
| SREC-II / ADI (15 years) | Quarterly payment | ~$9,600 |
| Net Metering (25 years) | Bill credit | ~$85,000 |
| Sales Tax Exemption | One-time savings | ~$2,200 |
| Property Tax Exemption (25 years) | Annual savings | ~$21,250 |
| Federal ITC (25D) | EXPIRED | $0 |
Estimated values based on 13 kW system at $2.95/W, $0.26/kWh utility rate, $85.90/MWh ADI rate. Actual values vary by system size, roof orientation, and your utility rate.
Real pricing data from EnergySage marketplace and NuWatt installations. No inflated numbers.
NJ Price Range
$2.75-$3.15/watt
Before incentives, fully installed
NJ Average
$2.95/watt
Market midpoint
Typical 8kW System
$22,000-$25,200
Before incentives
Based on $2.95/W average. Prices before incentives.
| System Size | Panels (~400W) | Total Cost | Annual Production | SREC-II / yr | Annual NM Savings |
|---|---|---|---|---|---|
| 6 kW | 15 | $17,700 | 6,780 kWh | $583 | $1,763 |
| 8 kW | 20 | $23,600 | 9,040 kWh | $777 | $2,350 |
| 10 kW | 25 | $29,500 | 11,300 kWh | $971 | $2,938 |
| 13 kWNJ Average | 33 | $38,350 | 14,690 kWh | $1,262 | $3,819 |
| 15 kW | 38 | $44,250 | 16,950 kWh | $1,457 | $4,407 |
| 20 kW | 50 | $59,000 | 22,600 kWh | $1,942 | $5,876 |
Annual production based on 4.2 peak sun hours/day. NM savings based on $0.26/kWh retail rate (PSE&G). SREC-II based on $85.9/MWh (EY2025-26). Actual values vary by roof orientation, shading, and panel efficiency.
Five paths to solar in NJ. Each has different trade-offs in the post-ITC era.
Maximum long-term savings
Upfront Cost
$36K-$41K (13 kW)
Monthly
$0/mo after payback
Payback
7-9 years via SREC-II + net metering
25-Year Savings
$85,000+
Pros
Cons
$0 down with ownership benefits
Upfront Cost
$0 down (typically)
Monthly
$200-$350/mo (10-15 yr term)
Payback
9-11 years (with payments)
25-Year Savings
$65,000+
Pros
Cons
Immediate savings, no upfront cost
Upfront Cost
$0
Monthly
Per-kWh rate (10-20% below retail)
Payback
Savings from month 1
25-Year Savings
$35,000-$55,000
Pros
Cons
Predictable monthly costs
Upfront Cost
$0
Monthly
Fixed monthly payment
Payback
Savings from month 1
25-Year Savings
$35,000-$55,000
Pros
Cons
Renters, condos, shaded roofs
Upfront Cost
$0
Monthly
Subscription (offset by credits)
Payback
Savings from month 1
25-Year Savings
10-40% bill savings ongoing
Pros
Cons
Estimate your return on investment with SREC-II income, net metering credits, tax exemptions, and financing comparison. Reflects the 2026 post-25D reality.
Estimate your solar return on investment with SREC-II income, net metering credits, and NJ tax exemptions.
Federal Residential Solar Tax Credit (Section 25D) Expired
Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. Section 25D expired December 31, 2025.
Northern and central NJ (largest utility)
Electric Rate
$0.26/kWh
Net Metering
1:1 retail credit
SREC-II Rate
$85.90/MWh
Interconnection
2-4 weeks typical
NJ has the highest property taxes in the US
Payback Period
6.1
years
25-Year Savings
$118,441
total
Monthly Benefit
$486
per month
Estimates based on average 2026 NJ solar pricing, ADI rate of $85.90/MWh (EY2025-26), 1:1 retail net metering, 6.625% sales tax exemption, and 100% property tax exemption. Section 25D residential ITC expired Dec 31, 2025 — $0 federal tax credit for cash/loan purchases.
All four NJ utilities offer 1:1 net metering. Here is how they compare for solar.
| Utility | Rate | Net Metering | Interconnection | CSEP (MW) | Territory |
|---|---|---|---|---|---|
| PSE&G | $0.26/kWh | 1:1 retail credit | 2-4 weeks typical | 144 | Northern and central NJ (largest utility) |
| JCP&L (FirstEnergy) | $0.26/kWh | 1:1 retail credit | 3-6 weeks typical | 72 | Central and western NJ |
| Atlantic City Electric | $0.25/kWh | 1:1 retail credit | 2-4 weeks typical | 30 | Southern NJ and Shore communities |
| Rockland Electric (RECO) | $0.27/kWh | 1:1 retail credit | 2-3 weeks typical | 4 | Northwestern NJ (Bergen/Passaic border) |
All utilities offer 1:1 retail rate net metering for systems up to 5 MW. Rates are residential averages as of February 2026.
NJ has one of the best net metering policies in the country — 1:1 retail rate credit. This is critical for post-ITC solar economics.
Your panels produce electricity during the day
Excess is exported to the grid — you get 1:1 retail rate credit
Credits roll over month to month
At annual true-up, remaining excess paid at wholesale rate (~$0.04/kWh)
Urgency: Potential Net Metering Changes
There are ongoing discussions about potential net metering restructuring in NJ. Systems installed under current rules are expected to be grandfathered. Locking in current 1:1 net metering terms is a strong reason to install solar sooner rather than later.
The ADI (Administratively Determined Incentive) — part of the SuSI program — pays NJ solar owners quarterly for 15 years. This replaces much of the lost ITC value.
Current Rate (EY2025-26)
$85.9/MWh
Duration
15 years
Quarterly payments
Typical 13kW Income
~$9,600
over 15 years
EY2024-25 (expired)
$90.91/MWh
EY2025-26 (current)
$85.9/MWh
EY2026-27 (upcoming)
$95.23/MWh
Rate Decrease Scheduled: March 13, 2026
A 10% automatic rate decrease is scheduled for March 13, 2026. The NJ BPU has authority to intervene before this date to prevent or modify the decrease. Monitor NJ BPU announcements for the latest decision.
Cannot install panels on your roof? NJ CSEP lets you subscribe to a local solar farm and save 10-40% on your bill — no installation needed.
Dive deeper into specific NJ solar topics. Every guide is updated for 2026 and reflects the post-ITC reality.
How SREC-II works, current rates, 15-year payment structure, and the March 2026 rate decrease.
How to subscribe, 10-40% bill savings, LMI set-aside, and available projects by utility.
1:1 retail credit, monthly rollover, annual true-up, and potential policy changes.
Current pricing by system size, city-level cost data, and factors affecting your quote.
Why NJ solar still works post-ITC, and how SREC-II + net metering fill the gap.
6.625% sales tax exemption and 100% property tax exemption explained.
Compare utility rates, net metering credits, interconnection timelines, and CSEP allocation.
Side-by-side financing comparison for NJ in 2026 — who claims what, payback timelines.
Find your NJ utility, rate, net metering terms, and community solar options by ZIP code.
Commercial ITC (Section 48), ADI rates for non-residential, and NJ commercial incentives.
New Jersey Energy Hub
Solar, heat pumps, and utility guides
The most common questions about solar in New Jersey after the ITC expiration.
Yes. NJ has some of the strongest state-level solar incentives in the country. SREC-II payments ($85.90/MWh for 15 years) generate approximately $9,600 for a typical system. Combined with 1:1 net metering (~$0.26/kWh retail credit), 6.625% sales tax exemption (~$2,200 saved), and 100% property tax exemption (critical in a state with $9,500/year average property taxes), a typical 13kW system pays for itself in 7-9 years and saves $85,000+ over 25 years — even with $0 federal tax credit.
SREC-II (officially called the Administratively Determined Incentive or ADI, part of the Successor Solar Incentive program) pays NJ solar owners $85.90 per megawatt-hour (MWh) for the current energy year (EY2025-26). Payments are quarterly for 15 years. A typical 13kW system producing about 14,700 kWh/year earns approximately $765/year or $9,600+ over 15 years. The rate is set by the NJ Board of Public Utilities (BPU).
NJ offers 1:1 retail rate net metering for systems up to 5 MW. When your solar panels produce more electricity than you use, excess energy is exported to the grid and you receive a credit at the full retail rate (typically $0.25-$0.27/kWh depending on your utility). Credits roll over monthly. At your annual true-up, any remaining excess credits are paid out at the lower avoided-cost (wholesale) rate. All four NJ utilities — PSE&G, JCP&L, ACE, and RECO — participate.
The residential solar tax credit (Section 25D) expired on December 31, 2025, under the One Big Beautiful Bill Act (OBBBA) signed July 4, 2025. Homeowners who purchase solar with cash or a loan in 2026 receive $0 in federal tax credits. However, third-party owned systems (lease or PPA) still qualify for 30% under the commercial ITC (Section 48/48E), because the financing company — not the homeowner — claims the credit.
Solar panels in NJ cost an average of $2.75-$3.15 per watt installed. For a typical 13kW system, that is approximately $36,000-$41,000 before state incentives. After the 6.625% sales tax exemption (~$2,200 savings) and factoring in SREC-II income ($9,600+ over 15 years), net metering credits, and property tax exemption, the effective cost is significantly lower. NJ has no upfront state rebate — the value comes through ongoing SREC-II payments and tax exemptions.
Yes. When you lease solar panels or sign a PPA (Power Purchase Agreement), a third-party company owns the system and claims the 30% commercial ITC under Section 48/48E. This credit lowers their cost, which is passed to you as a lower monthly payment or per-kWh rate. You do not claim any federal credit yourself, but you benefit from it through reduced pricing. The third-party system owner — not the installer — claims the credit. Section 48/48E remains available for projects beginning construction before July 4, 2026.
New Jersey has one of the largest community solar programs in the country — the Community Solar Energy Program (CSEP). With 750+ MW of capacity (expanded May 2025), CSEP lets you subscribe to a local solar farm and receive bill credits of 10-40%. No rooftop installation needed. 51% of capacity is reserved for low-to-moderate income (LMI) households. Available in all four utility territories: PSE&G, JCP&L, ACE, and RECO. Ideal for renters, condo owners, or anyone with a shaded roof.
All four NJ utilities offer identical 1:1 retail rate net metering, so the differences are minor. PSE&G and JCP&L have the largest service territories and most installer competition (potentially lower prices). RECO has a slightly higher retail rate ($0.27/kWh), meaning slightly higher net metering credits. ACE serves southern NJ where peak sun hours are marginally higher. For community solar, PSE&G has the largest CSEP allocation (144 MW). In practice, your utility does not make or break the solar decision — NJ incentives are strong across all territories.
For a cash purchase of a typical 13kW system, payback is approximately 7-9 years. This comes from SREC-II income (~$765/year), net metering savings (~$3,400/year at $0.26/kWh), and property tax savings (~$850/year). The 6.625% sales tax exemption (~$2,200) reduces upfront cost immediately. After payback, you enjoy 16-18 more years of essentially free electricity plus SREC-II income (for the first 15 years).
There are ongoing discussions about potential net metering restructuring in NJ, but no confirmed changes for 2026. Current 1:1 retail rate net metering remains in effect. Systems installed under current rules are expected to be grandfathered if any changes occur. This uncertainty is actually a strong reason to install solar sooner — locking in current favorable net metering terms before any potential policy changes.
The ADI program has a 10% automatic rate decrease scheduled for March 13, 2026. This would drop the residential net-metered rate from $85.90/MWh. However, the NJ BPU has authority to intervene before this date to prevent or modify the decrease. The upcoming EY2026-27 rate is projected at $95.23/MWh. Monitor NJ BPU announcements for the latest decision.
NJ does not have a dedicated statewide battery storage rebate like some other states, but battery storage paired with solar benefits from net metering (store excess for evening use), backup power value (NJ is prone to storms), and potential future programs. Community solar subscribers do not need batteries. For rooftop solar owners, a battery can maximize self-consumption and provide outage protection.
NJ law exempts 100% of the added value from solar installations from property tax assessment. This is significant because NJ has the highest average property taxes in the country (~$9,500/year). Without this exemption, a $38,000 solar system could add approximately $850/year to your property tax bill. The exemption is automatic — your solar installation adds $0 to your assessed property value for the life of the system.
NJ offers multiple alternatives. Community solar (CSEP) lets you subscribe to a local solar farm with no rooftop installation — savings of 10-40% on your electric bill. Ground-mounted systems are an option if you have yard space. Carport solar is available for larger properties. If your roof needs replacement first, many installers offer combined roof-and-solar packages that can be financed together.
With SREC-II ($85.9/MWh for 15 years), 1:1 net metering, and tax exemptions, NJ remains one of the best states for solar — even without the federal tax credit.