How much do solar panels cost in New Jersey?

Installing residential solar panels can cost between $10,000 to $30,000 or more, though individual costs vary significantly. On the higher end, we’ve talked to solar customers in New Jersey who spent $55,000 to $75,000 going solar. (Vina in Keansburg got a system worth $55,000, and it cost James in Burlington $75,000 to go solar.)

How you pay has a lot to do with your total costs, as Brenda in Dover found out: “I thought it would run me around $20,000. It ended up $40,000-something with financing.”

On the bright side, the cost to go solar in New Jersey has fallen 54% over the last 10 years, according to the Solar Energy Industries Association, and it will likely continue to go down.

Average cost by system size in New Jersey

Are solar panels worth it in New Jersey?

“They are worth every dollar I spent on them,” Lisa in Elizabeth said.

We’ve talked to hundreds more solar energy customers in New Jersey, and many are just as pleased with their decision to invest in solar panels.

Brandon in Camden said his energy production has been even better than anticipated: “It's definitely worth it. Even though they're not the cheapest out there, as long as somebody understands the value of what you put into something, it's gonna be beneficial.”

“My system is doing great,” Michael in Voorhees said. “I’m already at a $0 electric bill.” Others we talked to who went solar in New Jersey saw significant savings, even if they still have a monthly payment.

For example, Eric in Jackson isn’t generating 100% of his energy needs but still saves “so much money.”

“My utility charges me about $30 to $70 each February, but that's it,” he said.

Similarly, Frances in Old Bridge is saving a significant amount of money even though they still technically have to make a payment: “I've gotten my bill down to $80 from $680.”Sandra in Southampton Township just wishes she had installed solar panels when she first moved: “It would have literally saved me thousands and thousands of dollars.”

Considering the financial and environmental benefits, solar panels seem worth it in New Jersey. As long as your ongoing costs are lower than your current electricity bill, it’s hard to see the downside.

» STILL NOT SURE? Solar energy pros and cons

Cost factors of going solar in New Jersey

How much you actually pay for your solar panels depends on a range of factors, including the size of your system and the quality of your panels. How much sunlight your house gets throughout the year also makes a difference.

New Jersey gets an average of 3.5 to 4 hours of peak sun daily.

New Jersey has decent solar potential, although it's lower than in sunnier states. South Jersey has a higher average solar irradiance rating than the northern part of the state, according to the National Solar Radiation Database.

Panel efficiency

Solar panels vary in efficiency, with some panels producing more electricity than others of the same size. The average efficiency is around 15% to 20%.

Investing in quality panels pays off in the long run because they generate more power over time. For example, Carol in Metuchen considered proposals from four companies and “picked Sunpower because the kW output was equal to or higher than the others, the panels were the most efficient, and the cost/kW was at least as good or better than the others.”

Higher-efficiency panels are great if you have limited roof space — they generate more power per square foot, allowing you to produce the same energy with fewer panels. However, lower-efficiency panels may be more cost-effective if space isn't a concern.

» COMPARE: Most efficient solar panels

How you pay

It’s helpful to think of going solar in terms of your monthly costs. Getting solar panels is similar to getting a new car: You can pay cash, but most people finance, and you can also lease.

A solar loan works like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest). With a lease or PPA, you get all the benefits of renewable energy without owning the system.

Solar financing in New Jersey

In an ideal financing scenario, your system generates enough extra power to pay off the loan, like Marisol’s in Perth Amboy.

“I'm financing the system, and what I'm producing covers the price every month,” Marisol told us. “Plus, I'm making a little extra. My electric bill is $4.99 now.”

Marisol pays $107 per month on a 25-year loan.

“But for every extra 1,000 kilowatts of electricity that I produce, I get paid $91.20,” she said. “And I’m producing more. It’s 2,500 kilowatts I'm producing. So, I'm making $182 or $200. So, it’s paying for itself plus two tanks of gas.”

Solar leasing in New Jersey

Marla in Paulsboro started leasing a 26-panel system last year.

“I pay one flat fee of $97 per month for my solar rental for 25 years, and the electric bill taxes, which have so far ranged between $5 to $7 per month,” she said. Considering the average monthly electric bill is $112.39 in New Jersey, Marla’s getting quite a deal.

When we followed up a year later, Marla told us her electric bill payment was still consistently $5 to $7 each month, which is only the taxes. Most months, there’s a credit because the panels generate “way more than enough electricity,” and Marla should get $600 to $900 back each year.

“A rental is good because, this way, we did not have to worry about repairs or panel replacement,” Marla said. Plus, the monthly payment is more consistent.

» MORE: Solar panels: lease vs. buy

Power purchase agreements in New Jersey

A solar power purchase agreement (PPA) is similar to leasing. Somebody else (a solar developer) buys, installs and maintains solar panels on your property. You buy the power generated by the system on a per kilowatt-hour (kWh) basis. The cents/kWh is usually cheaper than the utility’s rate for the same amount of electricity.

A PPA is a great way to set up a solar system without the high upfront costs. A potential drawback is that you won’t be eligible for the same tax incentives.

Your solar company

Sometimes, people get a good price on the installation, everything is fine for a couple of years, and then issues come up with equipment that requires customer support.

For example, Ryan in Voorhees told us he paid $35,000 for a solar system in 2019. In November of 2022, he “found out that something was broken” with the system:

“We had generated 11.183 MWh (megawatt-hours) from the beginning of September 2021 through the end of September 2022. The going rate of 11 MWh of energy in 2022 for me was $227 per credit, meaning that my wife and I, as well as my two young children, are owed $2,497.”

It turns out Ryan’s inverter was broken, which is a relatively easy fix. The bad news is that “when that was replaced, my old credits disappeared with the inverter.”

Ryan told us he’s frustrated with the lack of customer support, which is understandable, considering solar panels are such a big investment. As of June 2023, the problem still needs to be resolved.

The lesson here: A reliable solar company might cost more upfront, but it's worth it now if you run into future complications with your system.

Condition of your roof

Most solar panels are designed to last 25 years or more, so you need your roof to last at least as long. Otherwise, you’ll have to pay to remove the panels, repair your roof and reinstall them, which can cost thousands of dollars.

Dorrine in Hammonton found this out the hard way when they had to pay $4,500 to remove the panels to fix a leaky roof. Jamieson in Gloucester City was charged $5,000 to remove and reinstall her panels.

Charles in Jackson told us he was quoted “up to the $6,350” to fix a similar issue, and “If I knew that, I would have waited until AFTER I got my new roof to convert to solar.”

Local permits

Before installing solar panels, you need building and electrical permits from your local building department. The installation contractor usually handles this and includes permitting costs in the overall price, but you should ask to confirm.

After installation, a representative of the local permitting agency (a building or electrical inspector) and your utility company that holds your interconnection agreement (Atlantic City Electric, Orange & Rockland, Public Service Electric & Gas, etc.) must approve your system.

New Jersey has a straightforward solar permitting process, but occasional delays happen. For instance, Wanda in Teaneck told us about “a little bit of a snag … The installers had to make some corrections during the initial turn-on process, where they didn't pass the utility company inspection. So, they had to go back and redo all that and that was a little bit of a setback as well.”

» GUIDE: Solar panel installation guide

Solar incentives, tax credits and rebates in New Jersey

New Jersey offers some of the best solar incentives in the U.S. The state’s net metering, property tax exemptions and solar renewable energy credits (SRECs) all offset your initial investment cost. Still, the federal solar investment tax credit (ITC) is a huge factor in reducing the cost of going solar.

The average ITC value in New Jersey is $5,817.

If you install a residential system by the end of 2032, you can deduct 30% of the system's total cost — including equipment, labor and permits — from your federal taxes. The credit drops to 26% in 2033 and 22% in 2034.

The ITC is a nonrefundable tax credit, so it’s carried forward into future years if your credit is more than you owe in federal taxes.

» MORE: New Jersey solar incentives

Compare solar installation companies in New Jersey

Compare popular solar companies available in New Jersey below. Read our guide about finding the best solar companies for more.

Bottom line

Going solar in New Jersey is cheaper than the national average, thanks to the state’s property tax exemptions and solar renewable energy credits (SRECs). Many solar energy customers we talked to in New Jersey are delighted with their decision to invest in solar panels. They see significant savings on their electricity bills, with some even achieving $0 electric bills.

The financial and environmental benefits make solar panels a worthwhile investment in New Jersey, as long as your ongoing costs are lower than current bills.

» STILL NOT SURE? Solar energy pros and cons