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The federal residential tax credit is gone, but New Jersey still offers the ADI program, full 1:1 net metering, and generous tax exemptions. Here is every program and incentive available to NJ homeowners right now.
$85.90/MWh
ADI Rate
$0.26/kWh
Avg Electric Rate
6.625%
Sales Tax Exempt
14-16 yrs
Avg Payback
New Jersey homeowners no longer receive a federal solar tax credit (Section 25D expired Dec 31, 2025). However, NJ still offers the ADI/SREC-II program ($85.90/MWh for 15 years, rising to $95.23 in EY2026-27), full 1:1 retail net metering ($0.23-$0.26/kWh), 100% sales tax exemption (6.625%, saving ~$1,740), and 100% property tax exemption. For a typical 8.9 kW system at $2.95/W ($26,255), these incentives combine to save $14,000+ in the first 15 years from ADI alone, plus $2,340-$2,650/year in net metering savings.
A quick visual overview of every New Jersey solar incentive — what is active, what has a deadline, and what is gone.
$85.90/MWh
Administratively Determined Incentive pays per MWh produced. EY2025-26: $85.90/MWh, rising to $95.23/MWh in EY2026-27. Locked for 15 years.
~$970-$1,076/yr for 15 years
$0.23-$0.26/kWh
Full retail credit for excess solar. Credits roll over monthly with annual true-up.
~$2,340-$2,650/yr
6.625% saved
Solar equipment and installation labor 100% exempt from NJ sales and use tax. Automatic at purchase.
~$1,740 on an 8.9 kW system
100% exempt
Solar value permanently excluded from property tax assessment under N.J.S.A. 54:4-3.113a.
~$480/yr permanently
30%+ ITC
Third-party system owners (lease/PPA companies) claim 30% commercial ITC on your behalf.
Lower PPA/lease rate
$0
Expired December 31, 2025. No federal credit for homeowner cash or loan purchases.
$0
The original NJ SREC market (2004-2022) is closed to new enrollees. Replaced by SREC-II/ADI.
The expiration of the federal residential solar tax credit (Section 25D) on December 31, 2025 was a significant blow to homeowners nationwide. For New Jersey residents, this means there is no longer a 30% federal credit to offset the cost of a cash or loan solar purchase. On a $26,255 system, that is $7,877 gone.
But here is what makes NJ different: New Jersey is one of only a handful of states that pays homeowners directly for solar electricity production. The ADI program provides $85.90/MWh (rising to $95.23/MWh next energy year) for every megawatt-hour your panels produce, locked in for 15 years. This is a guaranteed revenue stream on top of your net metering savings.
Combined with full 1:1 retail net metering, 100% sales tax exemption (6.625%), and 100% property tax exemption, NJ solar economics remain viable even without the federal credit. The payback is longer (14-16 years vs 9-11 years with the old ITC), but the 25+ year panel lifespan still delivers strong lifetime returns.
Any solar company telling you the "30% federal tax credit is still available" for homeowner-owned systems is either uninformed or deliberately misleading you. Section 25D expired on December 31, 2025. If a solar salesperson claims otherwise, walk away.
Exception: Section 48/48E commercial credits are still available for third-party system owners (solar lease and PPA companies) on projects beginning construction before July 4, 2026. The homeowner does not claim this credit directly — the financing company does, and passes savings through as a lower rate.
NJ's ADI program pays $85.90/MWh (EY2025-26) for every MWh produced, locked for 15 years. An 8.9 kW system earns ~$864-$958/yr — roughly $12,960-$14,370 total. Few states offer this kind of production incentive.
NJ law guarantees 1:1 retail net metering for residential solar. Credits at the full retail rate ($0.23-$0.26/kWh) with monthly rollover. No degradation, no time-of-use penalty — among the best in the country.
Both sales tax (6.625%) and property tax (100%) are fully exempt for solar in NJ. That saves ~$1,740 upfront on sales tax plus ~$480/yr in property taxes — real dollars that improve your payback.
The Administratively Determined Incentive (ADI) is NJ's successor to the original SREC program. Unlike the volatile SREC market (prices ranged from $20 to $680+/MWh), ADI provides a fixed, predictable rate locked for 15 years at the time you enroll. This is the cornerstone of NJ solar economics in 2026.
$85.90
/MWh (EY2025-26)
$95.23
/MWh (EY2026-27)
15 yr
Contract length
~$864
/yr for 8.9 kW
ADI Earnings Example
8.9 kW system producing ~10,057 kWh/year = ~10.057 MWh/year. At $85.90/MWh, that is $864/year. Over the 15-year contract: $12,960 total. If you enroll at the EY2026-27 rate of $95.23/MWh, annual earnings rise to $958/year and total to $14,370. These payments come on top of your net metering savings — they are additional income.
The ADI program replaced the volatile original SREC market. Here is how they compare:
| Feature | ADI (Current) | Original SREC |
|---|---|---|
| Program Type | Fixed rate (administratively set) | Market-traded credits |
| Current Rate | $85.90/MWh (EY2025-26) | N/A — closed to new |
| Next Year Rate | $95.23/MWh (EY2026-27) | N/A |
| Contract Length | 15 years | 10 years |
| Price Certainty | Locked at enrollment | Volatile ($20-$680 range) |
| For New Projects? | Yes | No (closed) |
| 8.9 kW Annual Value | ~$864-$958/yr | Was up to ~$3,000+/yr at peak |
New Jersey offers full 1:1 retail net metering — one of the most generous net metering policies in the country. Every kilowatt-hour your solar panels send to the grid earns a credit at the full retail electricity rate. This is the primary way NJ solar homeowners offset their electric bills.
$0.26/kWh
Northern & Central NJ (~70%)
8.9 kW system savings: ~$2,650/yr
$0.24/kWh
Western & Central NJ (~20%)
8.9 kW system savings: ~$2,440/yr
$0.23/kWh
Southern NJ (~10%)
8.9 kW system savings: ~$2,340/yr
New Jersey exempts solar energy systems from the state's 6.625% sales and use tax under N.J.S.A. 54:32B-8.36. This applies to all solar photovoltaic equipment, including panels, inverters, racking, wiring, and installation labor.
8.9 kW system at $2.95/W = $26,255 equipment cost. Without the exemption:
$26,255 x 6.625% = $1,740 in sales tax
With the exemption, you pay $0.
The exemption is automatic at point of sale. No paperwork needed from you.
Under N.J.S.A. 54:4-3.113a, New Jersey permanently exempts solar energy systems from local property tax assessment. Your solar panels will not increase your property taxes, even though they typically increase your home's market value by $15,000-$25,000.
New Jersey has the highest average property tax rate in the nation at ~2.42%. Without the exemption, a $20,000 solar value increase would cost approximately $484/year in additional property taxes. Over 25 years, that is over $12,100 in avoided property taxes.
At NJ's average effective tax rate (~2.42%):
Calculation: $20,000 assessed value x 2.42% = $484/yr
25-year savings: ~$12,100 (with modest rate increases)
While homeowners can no longer claim a federal tax credit on purchased solar systems, there is a narrow window where leases and PPAs retain a federal advantage.
Deadline: July 4, 2026 — Projects must begin construction before this date
After July 4, 2026, the Section 48/48E commercial ITC will no longer be available for new residential solar projects. Lease/PPA prices will likely increase.
A PPA lets you buy solar electricity at a fixed rate lower than your utility rate:
PPA rates may include annual escalators (1-3%). Even with escalation, most NJ homeowners save for the full term.
| Factor | Buy (Cash/Loan) | Lease/PPA |
|---|---|---|
| Upfront cost | $0 (loan) or full price | $0 |
| ADI/SREC-II | You keep ADI payments | Company keeps ADI |
| You own system? | Yes | No |
| 25-year savings | $30K-$45K | $12K-$20K |
| Federal credit | None (25D expired) | 48/48E to owner |
| Property value | +$15K-$25K | Minimal/complex |
| Maintenance | Your responsibility | Company handles |
| Contract length | 10-20 yr loan | 20-25 yr agreement |
New Jersey has three major electric utilities. All offer full retail net metering, but electricity rates differ.
| Feature | PSE&G | JCP&L | ACE |
|---|---|---|---|
| Coverage | ~70% of NJ | ~20% of NJ | ~10% of NJ |
| Territory | Northern & Central NJ | Western & Central NJ | Southern NJ |
| Avg Rate | $0.26/kWh | $0.24/kWh | $0.23/kWh |
| Net Metering | Full retail, 1:1 | Full retail, 1:1 | Full retail, 1:1 |
| ADI Eligible | Yes | Yes | Yes |
| Annual Solar Savings (8.9 kW) | ~$2,650 | ~$2,440 | ~$2,340 |
| Payback Period | ~14 years | ~15 years | ~16 years |
| Interconnection | 4-8 weeks | 4-8 weeks | 4-8 weeks |
Adjust system size, utility, and options to see exactly how much New Jersey solar incentives are worth for your home. All calculations use verified 2026 ADI program rates.
See how New Jersey incentives combine to maximize your savings
First-Year Value
$8,007
savings + ADI income + tax benefits
25-Year Lifetime
$125,929
on a $38,350 system
Payback Period
6.6 years
then pure savings
Estimates based on NJ averages. Actual values depend on system design, shading, utility rate changes, and eligibility. ADI rate shown is EY2025-26 ($85.90/MWh); a 10% auto-decrease is scheduled for March 13, 2026. Federal residential ITC (Section 25D) expired Dec 31, 2025.
Not every homeowner can install rooftop solar. If you rent, own a condo, or have a shaded roof, community solar lets you benefit from solar energy without installing anything on your property. New Jersey's Community Solar Energy Pilot (CSEP) program is one of the strongest in the country, with a particular focus on serving low-to-moderate income households.
Transparency matters. Here are the solar programs and incentives that New Jersey does not currently offer. If a solar company tells you otherwise, that is a red flag.
Section 25D expired December 31, 2025. Homeowners who buy with cash or loan get $0 in federal credits.
The original SREC program (2004-2022) is closed to new enrollees. You cannot earn legacy SRECs on a new system.
Unlike some states, NJ does not offer an upfront per-watt rebate for residential solar. Your incentive is the ADI production payment.
NJ does not offer a state income tax credit for solar installations. The ADI program is the primary state incentive.
Unlike CT (Smart-E) or MA (Mass Save), NJ does not have a state-backed low-interest solar loan program. Standard solar loan rates apply (6.5-9% APR).
Section 25C (heat pumps, insulation) also expired December 31, 2025. No federal energy efficiency credit available.
New Jersey's solar incentive landscape is thinner than it was in 2024, when homeowners had the 30% federal ITC plus the ADI program. But NJ's remaining advantages — the ADI production payments ($85.90-$95.23/MWh for 15 years), full 1:1 retail net metering, 6.625% sales tax exemption, and permanent property tax exemption — still make solar a worthwhile long-term investment. The payback is 14-16 years, and panels last 25+ years, giving you 9-11 years of free electricity after breakeven.
New Jersey's ADI program and full retail net metering are competitive with neighboring states.
| State | Avg Rate | Sales Tax | Property Tax | Net Metering | Special Program | Payback |
|---|---|---|---|---|---|---|
| New Jersey | $0.23-$0.26 | 100% exempt | 100% exempt | Full retail | ADI $85.90/MWh | 14-16 years |
| Connecticut | $0.27-$0.28 | 100% exempt | 100% exempt (15yr) | Full retail | Smart-E 6.99-7.99% | 8-10 years |
| Massachusetts | $0.28-$0.32 | 100% exempt | 100% exempt | ~60% NEM 3.0 | SMART $0.03/kWh | 12-14 years |
| New York | $0.22-$0.30 | 100% exempt | 100% exempt (15yr) | Value of DER | NY-Sun rebates | 10-14 years |
New Jersey was a solar pioneer, creating the first tradeable solar credit market in the US in 2004.
NJ launches original SREC program — first tradeable solar credit market in the US
NJ reaches 1 GW installed. SREC prices peak above $600/MWh.
Solar Act of 2012 extends NJ Renewable Portfolio Standard (RPS) to 4.1% solar by 2028
Clean Energy Act signed — NJ commits to 50% renewable by 2030, 100% clean by 2050
SREC-II (Successor Program) launches for new projects, replacing the original SREC market
ADI (Administratively Determined Incentive) replaces SREC-II for new residential projects
Federal residential ITC (Section 25D) expires December 31. ADI continues.
NJ relies on ADI ($85.90-$95.23/MWh), net metering, tax exemptions. 48/48E deadline July 4.
Common questions about New Jersey solar incentives in 2026.
No. The federal residential solar tax credit (Section 25D) expired on December 31, 2025. New Jersey homeowners who purchase solar panels with cash or a loan receive $0 in federal tax credits. However, if you go solar through a lease or PPA, the third-party system owner may still claim Section 48/48E credits through July 4, 2026, which can translate to lower pricing for you.
The Administratively Determined Incentive (ADI) is New Jersey's current solar incentive for residential systems. It pays a fixed rate per megawatt-hour (MWh) your system produces for 15 years. The current rate is $85.90/MWh for Energy Year 2025-26, rising to $95.23/MWh for EY2026-27. For a typical 8.9 kW system producing ~10,057 kWh/year, that is approximately $864-$958 per year, or $12,960-$14,370 over the 15-year contract.
The average cost of solar in New Jersey is $2.75-$3.15 per watt before incentives. A typical 8.9 kW system costs approximately $26,255 at $2.95/W. After the sales tax exemption (~$1,740 saved), effective cost is ~$24,515. With ADI payments (~$864-$958/yr for 15 years) and net metering savings, the payback period is 14-16 years for a cash purchase.
Yes. Under N.J.S.A. 54:4-3.113a, New Jersey permanently exempts solar energy systems from local property tax assessment. Adding solar does NOT increase your assessed home value for tax purposes, even though solar typically adds $15,000-$25,000 in market value. With NJ's average effective property tax rate of ~2.42% (highest in the US), this saves approximately $484 per year.
New Jersey offers full 1:1 retail net metering. PSE&G customers earn credits at ~$0.26/kWh, JCP&L at ~$0.24/kWh, and Atlantic City Electric at ~$0.23/kWh. Credits roll over month-to-month with an annual true-up. Systems up to 2 MW are eligible. NJ net metering is among the best in the nation — full retail credit with no reduction.
The original NJ SREC program (2004-2022) was a market-traded credit system where prices fluctuated between $20 and $680+/MWh. It is now closed to new enrollees. SREC-II (2021) was the interim replacement, and ADI (2022+) is the current program. ADI provides a fixed, predictable rate ($85.90/MWh) locked for 15 years at enrollment — much lower than peak SREC prices but far more stable and predictable.
Both options have merit. Purchasing gives you full ownership, ADI payments ($85.90-$95.23/MWh for 15 years), maximum long-term savings, and the property tax exemption benefit. A lease or PPA offers $0 down because the third-party owner can claim federal Section 48 credits (30%) through July 4, 2026. After that deadline, lease/PPA pricing may increase as the commercial ITC disappears.
Yes, through community solar. New Jersey's Community Solar Energy Pilot (CSEP) program allows renters, condo owners, and homeowners with shaded roofs to subscribe to a local solar farm. You receive credits on your electric bill — typically 5-20% savings — without installing anything on your property. NJ has one of the strongest community solar programs in the country.
All three major NJ utilities (PSE&G, JCP&L, Atlantic City Electric) offer full 1:1 retail net metering. PSE&G customers ($0.26/kWh) see the fastest payback due to the highest rates, followed by JCP&L ($0.24/kWh) and ACE ($0.23/kWh). The ADI program and tax exemptions are the same regardless of utility.
Without the federal ITC, the average solar payback period in NJ is 14-16 years for a cash purchase. While longer than the pre-2026 era (when the 30% ITC brought it to 9-11 years), NJ solar is still a strong investment. ADI payments ($85.90-$95.23/MWh for 15 years), full retail net metering, and both tax exemptions combine to offset most of the system cost. With panels lasting 25+ years, you get 9-11 years of free electricity after breakeven.
NJ Energy Hub
All NJ solar & heat pump guides
NJ Solar Guide
Complete NJ solar overview
ADI/SREC-II Program
How ADI payments work
Community Solar (CSEP)
Solar for renters & condos
NJ Net Metering
How credits work in 2026
NJ Solar Cost 2026
Pricing breakdown by city
Solar Without the ITC
Is it still worth it in NJ?
NJ Tax Exemptions
Sales & property tax details
PSE&G vs JCP&L vs ACE
Utility rate comparison
Buy vs Lease vs PPA
Best financing for NJ
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NJ Commercial Solar
Business solar guide
Newark Solar Cost
City-specific pricing
Jersey City Solar Cost
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Section 48 lease/PPA deadline: July 4, 2026. ADI currently at $85.90/MWh (rising to $95.23).