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New Jersey’s Authority on Solar Energy (732) 269-0308
Solar Energy System

Why New Jersey Is One Of The Best States For Solar In The U.S.

The solar power movement is growing globally! Solar Power is now the fastest growing renewable energy technology in the world. It also shows no sign of slowing down, with total installed global capacity to reach 969 GW by 2025!

Manufacturing costs are continuing to spiral downwards, making the technology a lot more affordable and within reach of the average man on the street.

Government incentives, subsidies and feed-in tariffs have all added to the financial appeal of going solar too.

Not to mention new opportunities around the corner that will allow prosumers to trade energy through blockchain technology just like the big players except on a smaller scale.

Still investing in solar is a big ticket item and does require some due diligence and homework.

Here we look at how the State of New Jersey fairs when it comes to investing in solar power.

Solar Power in the State of New Jersey

The first thing to consider before investing in solar power is how much are currently paying for electricity? The higher your utility tariff rate the higher your return on your investment when investing in solar power.

According to the latest data collected by the EIA, the US has an average kWh rate of US$0.10.

The state of Washington has the lowest tariff rate of US$0.07 per a kWh.

Hawaii has the highest utility tariff rate of US$0.23 per a kWh and the most likely reason for this is that their primary energy source is petroleum. As Hawaii is an island they also have to ship everything in, adding to the cost of petroleum.

Whereas the state of Washington has Hydroelectric power as its primary energy source. Hydroelectric is an extremely efficient and cheap source of energy.

State Average retail price (cents/kWh)
Alabama 9.56
Alaska 17.93
Arizona 10.33
Arkansas 8.13
California 15.23
Colorado 9.83
Connecticut 17.24
Delaware 11.09
District of Columbia 11.73
Florida 9.91
Georgia 9.59
Hawaii 23.87
Idaho 8.08
Illinois 9.38
Indiana 9.22
Iowa 8.55
Kansas 10.49
Kentucky 8.42
Louisiana 7.46
Maine 12.8
Maryland 12.21
Massachusetts 16.48
Michigan 11.05
Minnesota 9.99
Mississippi 8.67
Missouri 9.74
Montana 8.84


Back to the state of New Jersey though!

Depending on whether you consider a glass as half full or half empty, New Jersey has an average utility tariff of US$0.13 per a kWh. In terms of affordability it’s really sitting in the upper band of utility tariff ranges. New York is trailing ahead at US$0.14 and California at US$0.15

A recent report released by the US DoE end of 2017 stated that the cost of residential PV had fallen to on average US$0.09 per a kWh!

If your current utility cost is higher than the installed solar PV kWh production cost then you would immediately benefit from solar PV electricity savings.

Another factor that plays an important role in whether solar power is suitable for your location or not is the amount of daily peak sun hours your area. A peak sun hour refers to how much solar energy is available in an area during a typical day. A peak sun hour typically, 1 000 watts per a square meter.

The US on average receives between 3 to 4 peak sun hours per a day.

A solar insolation map will show you the amount of solar energy your location receives on an average day during the worst month of the year.

Several sources have tables with data at a state level.

The state of New Jersey has an average of 4.21 peak sun hours per a day when looking at the average of both summer and winter values. Whereas Alaska has a low average peak sun hour value of 3.55 days.

Inyokem, California has the highest in the US at an average of 7.66 peak sun hours per day.

These are factors you don’t have control of unless you have course move to the optimal location. However, you can increase your solar output by using high-efficiency solar panels and optimizing the position of the panels.

New Jersey Solar Incentives

Government economic incentives for solar power can include tax credits, subsidies and grants. All these go a long way to making the transition to clean energy more cost-effective and smoother.

So how does New Jersey fair on the Solar Incentives?

The state of New Jersey has a nationwide ranking of 14 when it comes to solar rebates.

Solar Power Performance Payments

The Solar Power Performance Payments otherwise known as SREC (Solar Renewable Energy Certificates) is the 2nd best in the country.

Each time a solar power system generates 1 000 kWh of clean issue, the owner of the system is issued a SREC. Now the ratio of SRECS issued per a year per a solar power system is in the region of 1.15 to 1. To give an example a standard sized home would normally have a 5 kW PV system installed. A system of this size would normally be issued more or less 6 SREC’s per an annum.

These SREC’s can be traded on an energy trading exchange where utilities would buy them. The cost per a SREC varies throughout the year as it’s a free floating exchange based on market principles. SREC prices vary between $180 and $230 per a certificate issued.

If you are considering investing on solar power then it’s advisable not to delay as the New Jersey legislature has already passed a bill proposing to get rid of SREC’s! If you leave it too late then you might miss out on this opportunity!

New Jersey Solar Power Rebates

As the SREC incentive model is used on NJ as the main driver for incentivizing renewable energy, solar power rebate opportunities are limited. However, one can take advantage of The New Jersey Clean Energy Residential New Construction Program. So if you building new hours then it makes sense to ensure your home meets the New Jersey Energy Star Standards as various incentives exist for building an energy efficient home and one that uses solar power. More information can be found in the link above.

Property Tax Exemption

Having a solar PV system installed at your home increases the value of your home significantly. But, you shouldn’t be penalized for installing a solar PV system when it comes to paying property taxes! Luckily government has the same attitude so when it comes to property tax assessors valuing your home, they can’t charge you any more tax based on the increased value of your home!

Sales Tax Exemption

When you invest in a solar power system the state will give an exemption on the sales tax. That’s an upfront savings of 7% already and can save you hundreds of dollars!


Investing in solar power has never been such a good deal. Costs have decreased drastically in recent years making it more affordable for the man on the street. Government incentives and tax rebates are numerous depending on the state you live in.

The return on your investment also depends on how much you pay for grid consumption and also the location where you live. Some states have more sun hours than other states.

It helps to do your homework before investing.

The state of New Jersey has a decent amount of sun hours per an annum and the cost of electricity is also quite high compared to other states. Government incentives are also lucrative, making it an ideal time to invest in solar if you live in NJ.