New Jersey is one of the strongest residential solar markets in the US in 2026. Our model puts typical payback near ~6.5 years even with the federal credit gone — comparable to Massachusetts, the other top-tier Northeast stack.
The reason is unusual. Most states lean on one or two solar incentives. New Jersey stacks four:
- Full 1:1 retail net metering on PSE&G, JCP&L, and Atlantic City Electric.
- High retail electricity — about ~26¢/kWh, which makes each self-consumed kWh valuable.
- SuSI ADI — a fixed $76.50/MWh production payment for 15 years on top of net metering.
- Both sales tax exemption (6.625%) and property tax exemption (100% of added value).
NJ has no state income tax credit. SuSI replaces it as the main state-level incentive — and unlike older SREC markets, the SuSI rate is locked and predictable.
What changed
The federal Residential Clean Energy Credit (§25D) — the 30% homeowner credit — was repealed for systems installed after December 31, 2025. For 2026 New Jersey buyers, the federal credit on a purchased system is $0. The same applies to home batteries purchased outright. The §48E commercial credit (30%) still exists, but only for leased or third-party-owned systems — the lessor claims it, not you. This is why PPAs and leases remain popular in NJ: the PPA provider takes both the §48E credit and SuSI revenue. If you buy outright, those go away. Full federal context here.
VERIFIED 2026-06 · irs.govNet metering: full retail 1:1
New Jersey requires PSE&G, JCP&L, and Atlantic City Electric to offer full retail-rate 1:1 net metering for residential systems up to 5 MW.
- Self-consumed solar offsets retail (~26¢/kWh on PSE&G).
- Exports are credited at the same retail rate, 1:1.
- Credits roll over month-to-month with an annual true-up.
- This calculator models the PSE&G case.
One caveat to watch: PSE&G introduced time-of-use rates on June 1, 2026. The 1:1 net metering rule itself is unchanged, but the underlying retail rate structure may shift over time. If you're a PSE&G customer, ask your installer whether you'll be defaulted to a TOU plan and how that affects your bill profile.
VERIFIED 2026-06 · NJ BPURetail ~26¢/kWh — half the driver
New Jersey has among the higher residential electricity rates in the US — about ~26¢/kWh. That's not Massachusetts territory (~30¢) but it's roughly double what most US states pay (Florida ~14¢, Colorado ~15¢).
High retail + 1:1 net metering means every kWh of solar production is worth ~26¢ to you, whether it goes to your house directly or onto the grid. That alone moves payback into single digits before any state incentive is counted.
VERIFIED 2026-06 · eia.govSuSI: the fixed production incentive (the actual story)
This is what makes NJ different from other 1:1 retail states. On top of net metering, you also receive the SuSI Administratively Determined Incentive (ADI) — a production-based payment from your utility paid quarterly. The key facts:
- Fixed $76.50/MWh (~7.65¢/kWh) of production.
- 15-year term, locked at registration.
- Paid quarterly, no market volatility.
- For systems registered on or after March 6, 2026. (Earlier cohorts received $85/MWh — that rate is closed to new applicants.)
- Runs on top of net metering, not instead of it.
For a typical 5 kW system producing about 6,500 kWh/year, SuSI pays roughly $500 per year — about ~$7,200 total over 15 years (accounting for panel degradation). That's a material chunk of your payback math.
One thing to plan for: SuSI ends after year 15. Our 25-year analysis shows years 16–25 carrying electricity savings only. Don't model SuSI as if it runs for the full system life — it doesn't.
The earlier SREC and TREC markets, which valued solar production through a tradable certificate with volatile pricing, have closed for new applicants and been replaced by SuSI's fixed-rate structure. That predictability is the upside.
VERIFIED 2026-06 · NJ BPU SuSI ADI program; PJM GATSTesla SREC-II buyout — an option, not a requirement
Tesla offers a ~$660/kW upfront buyout that trades your 15-year SuSI income for cash at install. For a 5 kW system that's about $3,300 upfront instead of ~$7,200 over 15 years (nominal — not a fair comparison without discounting, but the trade-off shape is real).
Whether it's a good deal depends on your time-value preferences, your installer relationships, and whether the $660/kW number is the version offered to you. This is not modeled by default — we show the 15-year SuSI stream. If a buyout is on the table for you, run both scenarios with your installer before committing.
What NJ doesn't have — and what it has
No state income tax credit. New Jersey does not offer a residential solar income tax credit. SuSI is the main state-level incentive instead. If a quote lists a "NJ solar credit," ask for the statute citation.
Property tax exemption (100%). The added home value from your solar system is exempt from New Jersey property tax.
Sales tax exemption (6.625%). Solar equipment is exempt from the NJ state sales tax — roughly $900–$1,000 saved on a typical residential system.
Battery in New Jersey
A home battery makes economic sense when the retail-export gap is large — you store solar that would have exported cheaply and use it instead of buying retail later. Under NJ's 1:1 net metering, that gap is effectively zero, like Florida, Virginia, New Mexico, Colorado, and Massachusetts. On pure energy arbitrage, a battery in NJ doesn't pay off.
There's no federal credit on the battery purchase in 2026 (§25D repealed). SuSI is production-based, so it pays the same whether you have a battery or not — adding a battery doesn't increase SuSI income.
If you want a battery in NJ, the case is resilience (storms, outages), not export economics. Don't expect a battery to shorten payback.
The honest picture
New Jersey solar in 2026:
- Federal credit: $0 — not 30%. (§48E 30% still exists for leases/PPAs, claimed by the lessor.)
- State income tax credit: none. SuSI is the main state incentive instead.
- Net metering: full retail 1:1 — PSE&G, JCP&L, Atlantic City Electric. Residential up to 5 MW. Monthly rollover; annual true-up.
- PSE&G TOU rates started June 1, 2026 — may affect future bill structure (not the net metering rule itself).
- Retail rate: ~26¢/kWh, among the higher US rates.
- SuSI ADI: fixed $76.50/MWh (~7.65¢/kWh) for 15 years, locked at registration, paid quarterly, no market volatility. For systems registered from March 6, 2026 (earlier cohorts got $85 — closed). Ends after year 15.
- Tesla ~$660/kW upfront buyout option (trades 15-yr SuSI for cash) — not modeled by default.
- Property tax: 100% exempt on added value.
- Sales tax: 6.625% exempt.
- Battery: weak on arbitrage (1:1 gap is ~0). SuSI doesn't change with battery (production-based).
- Typical payback: ~6.5 years.
New Jersey's case for solar in 2026 isn't subtle. The incentive stack — high retail + 1:1 net metering + fixed-rate production payment + both tax exemptions — is one of the two strongest in the country, alongside Massachusetts. The structural difference is that MA's SMART program is variable and disputed enough that we don't model it (real payback there is likely better than the calculator shows), while NJ's SuSI is a flat, lockable per-kWh rate — we model it directly and the displayed payback is what you can plan on, assuming you register before the rate changes again.
Before you commit:
- Confirm your SuSI registration timing — the rate is locked at registration, and earlier cohorts got higher rates. Wait too long and a future cohort could be lower.
- Don't model SuSI past year 15 — it ends. Years 16–25 are electricity savings only.
- Confirm whether you're on PSE&G, JCP&L, or Atlantic City Electric — the 1:1 rule applies to all three, but retail rates and TOU structure differ.
- Decide explicitly on purchase vs PPA/lease — buyers lose §48E (it goes to the lessor in a PPA); SuSI also goes to the system owner. The choice is about cash flow, ownership, and tax position, not "free solar."
- If a Tesla SREC-II buyout is offered, run both scenarios (15-year SuSI stream vs upfront cash) before signing.
- Don't expect a battery to shorten payback in NJ — the case is resilience.
- Run the calculator with your actual ZIP and system size.
Estimates only — SuSI rate locks at registration; net metering varies by utility. Verify with your utility, installer, and NJ BPU. This is not financial advice.