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Solar Panels in New Jersey: Cost and Savings

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Cost of solar panels in New Jersey

The cost of a residential solar system can vary depending on factors such as the size and configuration of your system, the labor and permitting costs, and the component options you choose to include.

The average residential solar system has a cost of about $3 – $5 per watt, with a total cost of between $15,000 and $25,000. However, taxes and other incentives can help you save on a home solar energy system.

Solar panel setup

One of the biggest factors that will impact the cost of your residential solar system is your setup and the equipment you include. Some pieces are necessary, while others are optional. The staple solar system components include:

  • Solar panels: These are the core of your solar system. You can choose between monocrystalline, polycrystalline, and thin-film. Each type has its own performance and cost.
  • Racking and mounting equipment: You’ll need this equipment to attach your solar panels, whether you’re doing ground or roof installation.
  • Inverter: An inverter is necessary to take the power your solar panels generate and turn it into usable electricity for your home.
  • Battery: If your solar panels generate more energy than you can use, batteries can help you to store the excess energy to use later or resell.

Solar incentives and rebates in New Jersey

The federal government has implemented financial incentives to encourage people to install solar panels and other green energy infrastructure.

First, the federal government offers a 26% tax rebate to homeowners who install solar panels on their homes. There’s no cap on the credit, but the offer does expire at the end of 2021. However, if you miss the 2021 deadline, the federal tax credit is still available through the end of 2023 at a credit of 22%.  

New Jersey also has state-wide measures in place to help homeowners. First, the state offers a sales and property tax exemption for solar systems. You won’t pay sales taxes on your system, nor will you pay property taxes on the value-add to your home.

New Jersey also allows for net metering, where you can sell excess electricity back to the grid.

Solar energy in New Jersey may help lower your electric bills

In addition to the tax benefits, homeowners with solar also save on their monthly electricity bills. As of February 2021, New Jersey residents pay an average of 16.37 cents per kilowatt-hour and an average electricity bill of $106 per month. That’s more than $1,200 of potential annual cost savings.

Solar panel systems start at around $15,000. If you were able to fully maximize your cost savings, you could break even in as little as 12.5 years. But  that’s only factoring in the monthly electricity savings — it doesn’t take into account tax credits, rebates, and the property value added to your home.

Energy independence in New Jersey can help you

Installing solar panels can help you reach energy independence. When you reach energy independence, you’re not reliant on the electricity grid to power your home. 

Being energy independent comes with plenty of benefits, such as: 

  • Save money. Save on your electricity each month, especially during seasons of high demand when prices increase.
  • No power outages. You also won’t be as vulnerable to power outages. When everyone else loses power, your solar battery can continue to power your home.
  • Earn money. If you generate more solar power than you use, you can sell the excess back in New Jersey.

How to buy solar panels in New Jersey

Here are some of the things to think about before you purchase a residential solar power system:

  • Some HOAs have rules that may prohibit or require approval for solar panels before installation.
  • If you are planning to live in your home for a short time, you may not get the full cost-benefit.
  • If your location doesn’t get much sun because of weather patterns, trees, or other factors, solar panels may not make sense.

The future of energy is solar in New Jersey

New Jersey was an early adopter of solar power and started implementing policies as far back as 1978 to incentivize solar energy generation. Since then, New Jersey has become a national leader in solar energy. The state ranks seventh in the nation for solar generation and is responsible for almost three percent of the country’s solar power. 

Solar use in New Jersey continues to grow at impressive levels. Today, solar power makes up over six percent of the state’s electricity. More residential, nonresidential, and utility solar systems are newly installed each year.

Solar energy FAQs

What is the life expectancy of solar panels in New Jersey?

Solar panels have a life expectancy of 25-30 years or more. The product lifespan gives you plenty of time to recover your initial investment and continue to earn cost savings for many years.

Are there disadvantages to using solar energy in New Jersey?

Solar energy comes with a significant upfront investment, which can turn some people away. Another possible disadvantage is that solar panels may not be ideal if your roof is worn or shaded. 

Is it better to buy or lease solar panels?

Many people lease their solar panels because of the lower upfront investment. But ultimately, this method is not as cost-effective. When you lease, you don’t get to take advantage of the tax credits and exemptions. You’ll have monthly payments as long as you have the solar panels. Finally, you don’t benefit from the property value added to your home.

What percent of New Jersey energy production is solar?

As of the fourth quarter of 2020, New Jersey gets around 6.23% of its electricity from solar power.

 

[Millenius] / Shutterstock

Updated: 07/07/2021