Solar net metering is one of the strongest financial benefits of solar panels in New Jersey. This solar incentive allows residential and commercial solar panel owners to sell excess electricity back to the grid, increasing savings. But changes may be coming that could significantly reduce net metering benefits in New Jersey.
In this guide, we’ll explain how net metering works in New Jersey, its financial benefits, and the potential policy changes that could impact your solar savings if you don’t act fast.
What Is Net Metering?
Net metering is an agreement between a solar panel owner and their utility company. Under a net metering agreement, you can export the excess electricity your solar panels produce to the electric grid. Your utility company will credit you for the power you send to the grid, essentially spinning your electric meter backward. When your solar panels are not producing enough electricity, at night or on a cloudy day, for example, you can use your credits to buy electricity from the grid.
How Does Net Metering Work in New Jersey?
New Jersey is one of the only states that offers 1:1 net metering, which means your utility company will buy solar power from you at the same rate they charge for electricity. This 1:1 credit system means that every kilowatt-hour (kWh) of energy you send to the grid offsets a kWh of energy you consume later—drastically reducing your electricity bill.
Here’s how it works:
- Your solar panels produce electricity during the day, often generating more than your home needs.
- That extra energy goes back to the grid, and your utility company credits you at the same retail rate you would pay for electricity.
- At night or on cloudy days, when your solar panels aren’t producing as much, you use the credits you’ve earned to offset your electricity costs.
Who Is Eligible for Net Metering in New Jersey?
In New Jersey, all NJBPU-regulated utility companies—PSE&G, JCP&L, Atlantic City Electric, and Rockland Electric—are required to offer 1:1 net metering to solar customers. That means you get full credit for every kilowatt-hour of extra energy your panels send to the grid. But to qualify, your system needs to meet interconnection requirements, including making sure it doesn’t produce more electricity than you use in a year.
That’s why proper system sizing is so important. If your system is too big, you won’t qualify for net metering, which could limit your savings. When you go solar with NJ Solar Power, we’ve got you covered! We take the time to review a full year of your electric bills and consider future energy needs—like an EV charger or home expansion—so your system is just the right size to get the best return on your investment.
Why Net Metering Matters for NJ Solar Owners
Net metering isn’t just a perk. It’s an extremely valuable incentive that increases the financial benefits of solar panels.
- Lower Electric Bills – Every extra kWh your solar panels produce gets credited to your bill at full retail value, reducing what you owe each month.
- Maximize Your Solar Investment – Without net metering, any excess energy your system produces would go to the grid for free. With NJ’s 1:1 net metering policy, you get full credit for every bit of power you send back, making sure you get the most out of your solar panels.
- Year-Round Savings – Solar produces the most energy in the summer, but your usage might be higher in the winter. Net metering lets you bank credits during sunny months and use them when you need them, keeping your energy costs low all year.
- Faster Payback Period – Since net metering offsets your electricity costs so effectively, it can help you break even on your investment faster.
Is Net Metering Changing in NJ?
New Jersey has offered net metering for years, but that could be changing soon. The state has been debating changes to the 1:1 net metering credit, which could reduce the amount homeowners get paid for excess solar power. This means new solar customers in the future may not receive full retail credit for their electricity, making solar less financially beneficial than it is today.
While net metering isn’t disappearing completely, New Jersey may shift to a model where solar owners would get paid at a lower rate for the power they send to the grid. This could significantly cut into your savings if you wait too long to go solar.
These changes aren’t finalized yet, and if you install solar now, you can lock in 1:1 net metering while it’s still available. NJ Solar Power is here to help you take full advantage of New Jersey solar incentives. Reach out today to get started!