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The 30% residential tax credit is gone. Solar loan payments jumped ~30%. But New Jersey's ADI income, 1:1 net metering, and double tax exemptions make it one of the best states for solar financing in 2026.
Until December 31, 2025, homeowners who financed solar could claim a 30% federal tax credit (Section 25D) and use that lump sum to pay down their loan in Year 1. For a $30,000 system, that was a $9,000 payment that slashed your balance and reduced monthly payments going forward.
2025 (with ITC)
$30K system → $9K tax credit in Year 1 → Loan balance drops to $21K → ~$140/mo payment
2026 (no ITC)
$30K system → $0 tax credit → Full $30K financed → ~$195/mo payment
That's a ~39% increase in monthly payments. But NJ has powerful tools to offset this — keep reading.
Each option has trade-offs. The right choice depends on your credit, home equity, cash flow needs, and how long you plan to stay.
| Feature | Solar Loan | Home Equity Loan / HELOC | Personal Loan | Section 48E Lease / PPA |
|---|---|---|---|---|
| APR | 5.99-8.99% | 6.5-9.5% | 8-15% | N/A |
| Term | 10-25 years | 10-30 years | 3-7 years | 20-25 years |
| Down Payment | $0 | $0 | $0 | $0 |
| Monthly (10kW) | $180-220 | $160-200 | $350-500 | $120-160 |
| Total Cost (25yr) | $45-55K | $40-50K | $35-42K | $38-48K |
| Tax-Deductible Interest | ||||
| ADI Income | Yours | Yours | Yours | TPO keeps it |
| Own System | After buyout | |||
| Best For | Solar-specific terms, $0 down, you own the system | Lowest rate if you have equity, interest may be tax-deductible | Fast approval, no lien on home, paid off quickest | Lowest monthly payment, zero risk, no ownership hassle |
APR
5.99-8.99%
Term
10-25 years
Monthly (10kW)
$180-220
Total (25yr)
$45-55K
ADI Income
Yours
Own System
Yes
Best for: Solar-specific terms, $0 down, you own the system
APR
6.5-9.5%
Term
10-30 years
Monthly (10kW)
$160-200
Total (25yr)
$40-50K
ADI Income
Yours
Own System
Yes
Best for: Lowest rate if you have equity, interest may be tax-deductible
APR
8-15%
Term
3-7 years
Monthly (10kW)
$350-500
Total (25yr)
$35-42K
ADI Income
Yours
Own System
Yes
Best for: Fast approval, no lien on home, paid off quickest
APR
N/A
Term
20-25 years
Monthly (10kW)
$120-160
Total (25yr)
$38-48K
ADI Income
TPO keeps it
Own System
After buyout
Best for: Lowest monthly payment, zero risk, no ownership hassle
New Jersey's ADI (SREC-II) program pays solar system owners a fixed rate per megawatt-hour of electricity produced — for 15 years. This is guaranteed income that no other financing state benefit can match, and it is the single biggest reason NJ solar loans still work without the ITC.
ADI Rate (EY2026-27)
$95.23/MWh
Annual ADI Income
$1,031-$1,143
15-Year Total ADI
$15,400-$17,100+
At $1,031/year, ADI effectively covers $86/month of your loan payment. Combined with ~$260/month in electricity savings on a 10kW system, your total offset is ~$346/month — more than covering a typical $195-220/month loan payment.
NJ vs. other states without ITC: Most states lost 30% of their solar economics when the ITC expired. NJ's ADI recovers roughly 55-60% of that loss over 15 years. Add in 6.625% sales tax exemption ($1,800+ saved) and 100% property tax exemption, and NJ remains one of the top 5 states for solar ROI in 2026.
All calculations use NJ average cost of $3.05/W, a 20-year solar loan at 7.5% APR, the NJ electric rate of $0.26/kWh, and ADI at $85.90/MWh. No federal tax credit is included.
9,600 kWh/yr production | $825/yr ADI
12,000 kWh/yr production | $1031/yr ADI
14,400 kWh/yr production | $1237/yr ADI
* Calculations assume 20-year loan at 7.5% APR, 1:1 net metering, and no escalator. Actual payments vary by credit score and lender.
Without the ITC, lender terms matter more than ever. Here are the categories of lenders to compare:
Companies like Mosaic, GoodLeap, Sunlight Financial, and Dividend Finance offer $0-down solar loans with 10-25 year terms. They understand solar economics and often work directly with installers.
NJ credit unions and community banks sometimes offer green energy loans at competitive rates. Check with your existing bank first.
If you have 15-20%+ equity in your home, a HELOC can offer the lowest rates. Interest may be tax-deductible if the loan is secured by your home.
Unsecured personal loans from online lenders or banks. Fastest to close but highest rates and shortest terms.
Without the ITC, the lease/PPA option is more competitive than ever because the third-party owner (TPO) still claims the Section 48E commercial ITC. But you give up ADI income and long-term ownership. Here is when each makes sense:
Key NJ difference: In most states, leases beat loans post-ITC because there is no state incentive to keep. In NJ, the $18-21K in ADI income you forfeit with a lease/PPA is substantial. Run the numbers carefully before choosing a lease — NJ loan buyers have a real financial edge.
See our full comparison of all financing options:
Cash vs. Loan vs. Lease Solar in NJ 2026The Section 25D residential solar tax credit expired on December 31, 2025. There is no federal tax credit for homeowner-owned solar in 2026. This means solar loan payments are about 30% higher than in 2025, because borrowers no longer get a lump-sum ITC payment in Year 1 to pay down the principal.
Yes, New Jersey is one of the best states for solar loans even without the ITC. NJ ADI (SREC-II) payments of $85.90-$95.23 per MWh for 15 years generate $18,000-$21,000 in income for a 10kW system. Combined with 1:1 net metering, zero sales tax, and 100% property tax exemption, NJ solar loans still have an 8-11 year payback.
A HELOC typically offers lower interest rates (6.5-9.5% vs 5.99-8.99% for solar loans) and may have tax-deductible interest. However, a HELOC uses your home as collateral and requires existing equity. Solar loans are unsecured (no lien), have $0 down, and are purpose-built for solar. If you have significant home equity and want the lowest total cost, HELOC wins. If you prefer zero risk to your home, solar loan wins.
ADI (Administratively Determined Incentive), formerly called SREC-II, pays NJ solar owners $85.90 per megawatt-hour in Energy Year 2025-26, rising to $95.23/MWh in 2026-27. For a 10kW system producing ~12,000 kWh/year, that is roughly $1,031-$1,143 per year for 15 years — totaling $15,000-$17,000+. This income directly offsets your monthly loan payment.
Under Section 48E, a third-party company (not the homeowner) owns the solar system and claims the commercial investment tax credit. The homeowner pays a fixed monthly lease payment or a per-kWh rate (PPA) that is 10-20% below the utility rate. You do not own the system, and the third-party owner keeps the ADI income — but your monthly payment is the lowest of all options.
For a 10kW system costing approximately $30,500 (at $3.05/W), monthly solar loan payments range from $195-$220 depending on APR and term length. Your NJ electric bill savings of ~$260/month plus ADI income of ~$86/month effectively cover the loan payment, making many NJ solar loans cash-flow positive from day one.
Get a free, personalized solar quote with real financing options and ADI income projections for your address.