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The residential solar tax credit (Section 25D) is dead. But New Jersey homeowners have the strongest alternative in the Northeast: third-party ownership that captures the 30% ITC, ADI production payments, and five layers of incentive stacking.
$0 down. $85-150/mo lease or $0.11-0.17/kWh PPA. Day-one savings vs. $0.26/kWh utility rates.
New Jersey offers the strongest solar lease and PPA economics in the Northeast thanks to a five-layer incentive stack that no other state in NuWatt's service area can match. The third-party system owner captures all five revenue streams and passes the combined savings to you through lower monthly payments.
Bottom line: A 9 kW system in NJ generates roughly $945-$1,048/year in ADI income alone. Combined with the 30% ITC, full retail net metering credits, and tax exemptions, the system owner has multiple revenue streams that subsidize your low monthly payment. This is why NJ lease and PPA rates are among the most competitive available.
Each layer adds value for the system owner, and that value flows to you through lower lease and PPA rates.
30% of system cost
Financing company files IRS Form 3468. On a $26,550 system, the owner receives $7,965 back from the IRS.
$85.9/MWh rising to $95.23/MWh
Fixed payments for 15 years. 9 kW system producing ~11 MWh/year generates $945-$1048/year in ADI income.
100% of retail rate credited
Every kWh exported earns full retail credit. Excess rolls month-to-month. True-up annually at wholesale. Sized up to 100% of annual usage.
6.625% exempt
Solar equipment is fully exempt from NJ sales tax. The TPO company pays $1,759 less for the system, reducing your rate.
100% exempt statewide
Solar panels do not increase your property tax assessment. A $26,550 system adds home value without adding tax burden.
Total Combined 25-Year Value (System Owner)
$30,000 - $40,000+
This is why NJ lease/PPA providers can offer rates 30-45% below your utility bill. The incentive stack subsidizes your payment.
The residential solar tax credit (Section 25D) expired December 31, 2025. If you buy solar with cash or a loan in 2026, you get $0 back from the IRS. But Section 48/48E is still alive for third-party system owners.
A financing company (the "third-party owner") purchases and installs solar panels on your roof. You don't buy the system — you agree to either lease it (fixed monthly payment) or buy the power it produces (PPA, per-kWh rate).
Because the financing company legally owns the system, it files IRS Form 3468 and claims the 30% Investment Tax Credit under Section 48/48E. On a $30,000 system, that's $9,000 back from the IRS. The company also claims MACRS depreciation (5-year accelerated schedule + 20% bonus in 2026).
The financing company doesn't pocket the ITC — it uses the $9,000+ in tax benefits to reduce your monthly payment. This is why lease/PPA payments are typically 20–40% lower than what you'd pay on a standard solar loan without the ITC.
Your lease/PPA payment is locked in below your current electric bill rate. You save money starting month one. The system owner handles all maintenance, monitoring, and warranty claims.
With NuWatt's Propel program, the third-party owner transfers full ownership to you at year 5 — after the ITC recapture period expires. You get the best of both worlds: ITC savings upfront, full ownership long-term.
The third-party system owner (financing company) claims the 30% ITC under Section 48/48E. Not the installer. Not you. The financing company files IRS Form 3468 and passes the savings to you through lower lease/PPA rates. This is how the system works by design.
The ADI (Administratively Determined Incentive) is NJ's successor to the legacy SREC market. It provides fixed, predictable payments per MWh of solar production for 15 years. This is a major reason NJ has the best TPO economics in the region.
June 2025 through May 2026. A 9 kW system producing 11 MWh/year earns approximately $945/year in ADI income.
15-Year Total (at current rate)
~$14,175
Starting June 2026. An 11% increase over the current rate. Systems registered in EY2026-27 lock in the higher rate for 15 years.
15-Year Total (at next rate)
~$15,720
In most lease and PPA contracts, the third-party system owner registers the system with the NJ BPU and claims all ADI payments. The owner then factors this income into your lower lease/PPA rate. A system generating $945-$1,048/year in ADI income allows the provider to offer rates well below what would be possible without this incentive.
NJ's ADI program pays $85.90-$95.23/MWh at a fixed rate for 15 years. Pennsylvania's SRECs trade at $25-$40/MWh with no guaranteed rate and no fixed duration. NJ's program provides 2-4x the value with far greater certainty, making NJ TPO economics significantly stronger than PA.
With Section 25D dead, the math has shifted. Leases and PPAs are now more competitive than ever because only third-party owners can capture the 30% ITC. Propel is not available in New Jersey.
Upfront
$26,550
Monthly
$0
Federal ITC
$0 (25D expired)
Year 1 Savings
$2,400-3,100
25-Year Savings
$60,000-78,000
No federal ITC. ADI income goes to you ($945-1,048/yr).
Upfront
$0
Monthly
$180-260/mo
Federal ITC
$0 (25D expired)
Year 1 Savings
$200-900 net
25-Year Savings
$38,000-50,000
No federal ITC. Interest adds $10K-18K over loan life.
Upfront
$0
Monthly
$85-150/mo
Federal ITC
30% (system owner)
Year 1 Savings
$900-1,400
25-Year Savings
$22,500-35,000
System owner claims ITC + ADI. Savings passed to you as lower payments.
Upfront
$0
Monthly
Varies by production
Federal ITC
30% (system owner)
Year 1 Savings
$900-1,400
25-Year Savings
$22,500-35,000
PPA rate $0.11-0.17/kWh vs. $0.26/kWh utility. Owner claims ITC + ADI.
NuWatt's Propel program (which combines TPO ITC capture with ownership transfer at year 5) is currently available in Maine and Texas only. NJ homeowners should choose between standard solar leases and PPAs, which remain highly competitive here due to the exceptional incentive stacking.
Your savings depend on your utility rate. Higher rates mean a wider gap between your PPA/lease rate and what you currently pay.
Northern & Central NJ
~$0.26/kWh
All three utilities participate in full retail net metering and the ADI program. PSE&G territory covers the majority of NJ residents and has the highest rates, making it the best area for TPO solar.
Western NJ
~$0.24/kWh
All three utilities participate in full retail net metering and the ADI program. JCP&L covers western NJ with moderately high rates that still produce strong solar lease savings.
Southern NJ
~$0.23/kWh
All three utilities participate in full retail net metering and the ADI program. ACE covers southern NJ. While rates are the lowest of the three, the ADI stacking still makes TPO compelling.
How does NJ's incentive stacking compare? While MA has higher rates, NJ's ADI program and tax exemptions create the most comprehensive TPO value in the region.
| State | Avg Rate | Key Incentives | Year 1 Savings (PPA) | Stack Rating |
|---|---|---|---|---|
New Jersey | $0.26/kWh | ADI ($85.90/MWh) + full retail NM | $900-1,400 | Best |
Massachusetts | $0.33/kWh | SMART 3.0 ($0.03/kWh) | $1,200-1,800 | Excellent |
Pennsylvania | $0.18/kWh | SRECs ($25-40) + avoided cost NM | $500-800 | Moderate |
New Hampshire | $0.27/kWh | No state incentive, 85% NM | $800-1,200 | Good |
MA has higher utility rates ($0.33/kWh) which drive larger absolute savings. But NJ's ADI program provides a guaranteed second income stream that MA's SMART 3.0 ($0.03/kWh) cannot match in total value per kWh. For the system owner, NJ's combined stacking is the richest.
Not everyone can install rooftop solar. If you rent, live in a condo, or have a shaded roof, New Jersey's Community Solar Energy Program (CSEP) lets you subscribe to a shared off-site solar project at no upfront cost with guaranteed bill savings.
If your roof is suitable, a rooftop lease or PPA provides better economics than community solar. CSEP is the best alternative for those who cannot go rooftop.
Full NJ Community Solar GuideTime is limited. These deadlines determine whether your TPO provider can capture the incentives that lower your payments.
July 4, 2026
The One Big Beautiful Bill Act (OBBBA) requires the third-party system owner to begin construction before July 4, 2026 to claim the 30% ITC. NJ has high solar demand and permitting backlogs. Start by spring 2026.
March 2026 (Projected)
When a registration tranche fills, ADI rates auto-decrease by 10%. Systems registered before the trigger lock in the higher rate for 15 years. The next trigger is projected for March 2026.
June 2026
ADI rates rise from $85.90/MWh to $95.23/MWh starting June 2026. Systems registered in EY2026-27 lock in the higher rate. Consider timing your registration to capture the increase.
June 30, 2026
If bundling solar + EV charger installation, the $1,000 residential EV charger credit (Section 30C) expires June 30, 2026. This is separate from solar but relevant for whole-home electrification.
| Credit Rate | 30% With prevailing wage + apprenticeship compliance (6% without) |
| Who Claims It | The system owner (financing company) NOT the homeowner, NOT the installer |
| Residential Eligibility | Yes — via third-party ownership TPO company owns the system, leases/PPAs it to you |
| Construction Deadline | Begin construction before July 4, 2026 OBBBA sunset — projects must start before this date |
| Minimum Hold Period | 5 years System owner must hold for 5 years or face ITC recapture |
| Stackable Bonuses | Domestic content (+10%), Energy community (+10%) Can reach 50%+ total credit on qualifying projects |
| MACRS Depreciation | 5-year schedule + 20% bonus (2026) Additional tax benefit for the system owner |
Full pricing breakdown by system size and utility territory.
Read guideDeep dive into SREC-II rates, registration, and 15-year income.
Read guideHow full retail net metering works for NJ solar owners.
Read guideHow third-party ownership captures the 30% ITC for your roof.
Read guideNJ has the strongest TPO solar economics in the Northeast. With the July 4, 2026 ITC deadline approaching, now is the time to lock in your savings with a solar lease or PPA. $0 down, day-one savings, all maintenance included.
No pressure. No obligation. Just honest numbers for your NJ home.