When you start researching New Jersey solar panel costs, it gets overwhelming very quickly. Solar installation costs vary from company to company, and when you start throwing in incentives, rebates, and tax credits, your simple Google search turns into a complex, algebraic equation. Before you know it, you’re knee-deep in solar policy on some government website, calculator in hand, ready to burn the planet yourself out of sheer frustration.
Take a deep breath, and fear not our environmentally conscious friend, we’ve done the work for you. The simple answer? Solar installation costs in NJ are generally between $12k-$15k, after rebates and a federal solar tax credit. Want to know how we figured that out? Keep reading for all the nitty-gritty details on solar panel costs in New Jersey and for all the tips and tricks to get the best deal possible.
Primary Factors that Determine Cost
Size of the system
Most people want to produce enough energy with their panels to cover their electrical needs, eliminating their energy bills. Therefore, it’s helpful to start by determining your home’s energy needs. The average U.S. household consumes about 10,400 kWh (kilowatt-hour) per year, so assuming that the consumer invests in the popular 250-watt panels, between 28 and 34 panels would be suggested. The amount of sunlight you receive will also affect this number. New Jersey hovers around 56% sunny days, with about 2500 total hours of annual sunlight.
Equipment costs
The equipment needed for a solar system is:
Solar panels – There are currently two technologies dominating the market: monocrystalline and polycrystalline. Both work similarly, but monocrystalline has a higher efficiency rating. They vary in appearance and cost, with monocrystalline panels running more.
Related article: How do solar panels work?
Racking – Solar panels aren’t placed right onto your home’s roof. Instead, they’re mounted upon a racking system, which itself is installed onto your roof. The racking system places your solar panels so that they receive optimum energy from the sun, while also avoiding damage to your roof. If you are instead in the market for a solar carport or ground mount solar, you can also find a mounting system to fit your needs.
Inverters – Solar power is received as DC current, and the inverter switches it to AC power, which most homes are wired to use.
Performance monitoring system– These show how effectively your system is running, reporting the hourly electricity your solar system produces. Monitoring systems are also helpful in identifying if and when an issue comes up with your system.
Solar batteries – Solar power storage systems let homeowners use the solar energy that their homes generate when it is not sunny, such as at night or on cloudy days.
Solar installation company
Different solar installers offer a wide range of quotes. Some charge more because they invest in higher-quality equipment, or because they spend more on advertising.
Be sure to take the time to research which installers are in your area. Try to use word of mouth, asking neighbors who installed their solar panels and how happy they were with the job. It’s a great idea to ask multiple installers for quotes and compare their reviews and equipment used!
Related article: Best solar companies in New Jersey
As you compare prices, be sure to do plenty of research, collecting quotes from a variety of service providers in your area. You will likely receive quite a wide range of quotes, due to the difference in overhead fees an installer might charge you.
Taking the time to research could save you big on your installation costs- as in thousands of dollars! Big-name companies have a reputation because they’re already established, so they can charge more and not worry about competition from small-scale businesses. These names that are already well-established also frequently charge more to cover their marketing and additional overhead expenses.
Price of installation breakdown
Panels have a reputation for being pricey. However, they only tend to make up about 34% of your total cost. The major investment is actually in labor and overhead costs.
New Jersey solar incentives, tax credits, and rebates
New Jersey offers a good selection of solar incentives for residents who invest in solar. The Solar Renewable Energy Credit (SREC) program rewards you for each 1000 kilowatt-hours (kWh) of solar power your system produces, which is then sold to local utility companies.
The Federal Solar Investment Tax Credit (ITC) offers a generous savings of 30 percent tax credit on the cost of your solar power system. These savings will completely phased out by 2030. Now is a great time to take advantage of the ITC.
New Jersey offers residents a full tax exemption on the purchase of all solar energy equipment, including inverters and racking.
Finally, the Garden State offers a property tax exemption for residents’ renewable energy systems, including solar panels. All that’s needed to qualify for this exemption is to apply for a certificate from your local tax assessor. This will ensure that your property taxes will not increase, while you are also benefiting from an increased property value thanks to your clean energy system.
Related article: NJ solar energy incentives, rebates, and tax credits 2023
Solar financing options
Buying your solar panels outright has its benefits – being the owner, you will likely benefit from an increased home value and savings. Solar loans and solar leases/PPAs both offer $0 money down, and monthly payments that will most likely be less than your current utility bill. One advantage of a solar loan is that it can be paid off within 7 to 15 years. Solar leases, on the other hand, often come with a 20-25 year term.
Other Factors That Affect NJ Solar Panel Costs
With an investment as significant as solar panel installation, it is important to look at the big picture. Think of it as a long-term investment, calculating the cost and savings you will encounter over the next twenty years or so. Good things to keep in mind are:
- The price of the materials needed for installation
- Labor and overhead costs from your installer
- Maintenance fees
- Savings you’ll receive through federal, state and local tax credits
- The cost and average power usage on your current electric bills
- What you can expect to save on future bills (or lack of!)
Payback period
The Payback Period is how long it takes to financially recover from your solar power investment, be it by profit or savings. The payback on solar panel systems in NJ averages 5 years!
So after five years, the savings on your electricity bill have paid for the solar panels. And moving forward, electricity generated from the solar panels is essentially free, aside from the utility company connection fees. Remember too that solar panels have a 20-30 year warranty, so that is lots of savings over time. Because electricity rates in NJ are high, a typical NJ solar panel system will save you more than $75,000 over a 20-year span.
Electricity rates in NJ
Electricity rates in New Jersey average 15.78¢/kWh, the 7th highest in the nation. Considering the high electricity cost for both households and business owners, investing in clean energy will be both good for the environment and also your budget.
Your roof
Some roofs are perfectly built for a solar panel system installation, while others leave something to be desired. Some factors that matter are show steep your roof is, whether or not it has multiple levels, and if there are skylights or other items already installed on your roof.
The condition of your roof is also important. If the roof is old, it might need to be replaced since the solar panels can stay on them for decades. But keep in mind that the roof repair can be bundled into the solar project and qualify for the financial incentives and rebates.
Costs by city vary
The cost of your solar power system varies, based on the size of your home, how many watts you install, and which county you live in. For instance, the priciest county for solar panel installation is Cape May. A 5kW system goes for an average of $18,985 before tax credits, and $13,289 after you apply those savings. Going solar is considerably more affordable in Ocean County, where the same system would average $12,622. Tax credits would drive that down to a mean cost of $8,836.
These numbers are just estimates, and solar systems are highly customizable to your finances and power needs.
Maintenance costs
Solar power systems require minimal maintenance throughout the year. Cleaning and inspection are the major annual expenses. Cleaning will keep your system running smoothly, and an inspector can alert you if a problem does arise with your system.
For annual professional cleaning, companies charge between $3 and $10 per panel, or a flat rate of at least $100. Some people do clean their own systems, but it is advised to speak to your installer before you make such a decision!
An annual inspection averages $150 per year. During these inspections, the contractor searches for cracks or issues with the system. If a solar panel repair is needed, the average cost is $650.
Installation companies offer warranties for your protection, covering performance, workmanship, and equipment. In the event of inclement weather, your homeowner’s insurance should cover some of that expense as well. Again, check with a professional in that area for more information.
Home value increase
Property value does tend to increase for solar-powered homes, especially when those panels are purchased (not leased), and homes are located in an active solar market. States are considered an active solar market if they have a good amount of sunlight, there’s high installation rates, and the local government offers money-saving incentives towards the cost of installing a solar system. Good news for residents- New Jersey is one such place! NJ residents don’t just benefit from savings on their electric bills; they can look forward to an increase in their solar investment through property value. More studies need to be published to get a full understanding, but homes with installed solar panels have been found to increase in value by about 4%.
How to Calculate Your Solar Installation Costs
Solar panel cost calculator
Looking for more help in calculating the cost of your solar installation project? Well, you’re in luck! Google Earth has created Project Sunroof, an estimator to figure out your personalized solar quote. This technology utilizes Google Earth’s images to figure out your roof’s shape and local weather, two factors that greatly affect solar costs. Project Sunroof then prompts you to add your electric bill information, which helps them estimate how many solar panels you’d need and what solar panels cost would be.
Conclusion
In the Garden State, residents can benefit from its active solar market. There aren’t just ways to save on the expenses that come with installing solar panels- your solar power will actually make you money! If you’re thinking of going solar and live in New Jersey, there likely won’t be a better time than now to cash in on the SRECs and ITC credit, before it disappears for good. Talk to your local installers and see how you can benefit from your own clean energy system.
People Also Ask
What is the solar cost per watt?
In 2023, the cost for solar panels averages between $2.58 and 3.38 per watt. Prices have gone down in recent years and seems they will continue to do so, but money-saving incentives such as the investment tax credit (ITC) will not last long!
Is solar really worth it in NJ?
In short, yes. Solar power is currently so customizable to your needs that you can experience savings on your electric bill, whether you have a large house to outfit with panels or are leasing them on your modest home. Considering the generous savings that New Jersey offers, coupled with the limited-time federal tax credit, now is a great time to get started.
How many solar panels are needed to power a house?
This depends on the wattage of your solar panels, the size of your home, and the amount of energy you consume. This number also varies by how fully you want to cover your electrical needs. If you are powering a home with 250-watt solar panels and are using an average of 10,400 kWh per year of electricity, then approximately 28-34 panels would cover 100% of your electrical needs.
How long do solar panels last?
Solar panels are estimated to last for 20-25 years. They might still produce electricity after this time, but their production will likely slow down. Solar panels are quite durable, and require little maintenance, except for annual cleaning and inspection, which could alert you of any potential issues in your system. Be sure to research your panels’ warranties, ensuring they’re well-covered for defects and environmental damage.
Can I install my own solar panels?
You can- but that doesn’t mean it’s the right choice. A home solar kit often costs less, which can mean even more savings, but you do sometimes get what you pay for, so it’s a good idea to do your research and see just how reputable the company is.
A disadvantage is that installers are more often than not highly experienced, licensed and certified, and more familiar in general with the process. Some warranties only cover work done by licensed professionals, so check it out before committing to such an undertaking yourself. A professional’s experience comes with a price tag, but it might be worth it in the long run.
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