Is solar worth it in New Jersey in 2026?

How New Jersey pays for your solar power

Net metering at the retail rate. Full retail credit for each kWh produced, up to annual use, with surplus at year end paid at avoided cost. Rules unchanged since 2018, but the BPU opened a reform docket in 2024.

In the calculator, 40% of your solar output is used at home at the retail price and the rest is exported at about 100% of retail (our default for this kind of rule), so each solar kWh is worth 100% of the retail price on average. Change it if your utility pays more or less. Method

State or utility incentive	What it is worth
SuSI ADI (SREC-II) residential incentive	$77 per MWh for 15 years (registrations on or after July 27, 2026)
Sales tax exemption on solar energy systems	Exempt from NJ sales tax
Property tax exemption for certified renewable energy systems	Added assessed value from the system is exempt

How exports are credited

New Jersey uses statewide net metering under the Clean Energy Act of 2018 (L. 2018, c. 17) and rules at N.J.A.C. 14:8. The Board of Public Utilities (BPU) describes it this way: the utility credits the customer at the full retail rate for each kilowatt-hour produced by a Class I renewable system on the customer’s side of the meter, up to the total electricity the customer used during an annualized period. At the end of that period, any remaining credits are paid at the supplier’s avoided cost of wholesale power.

The system should be sized so that production does not exceed the customer’s annual use.

The law lets the BPU stop offering net metering to new customers once statewide net-metered capacity passes 5.8 percent of annual kilowatt-hours sold. BPU staff calculated that Energy Year 2024 (ended May 31, 2024) exceeded that level and opened a proceeding, Docket QO24090723, to develop an updated mechanism for new customers. That is a review, not a decision. The BPU had not ordered a replacement for full retail net metering when this page was updated on October 7, 2026, but it can change the rules for new customers, so the current terms are not guaranteed for future applicants.

State incentives in 2026

The federal 30% credit ended for systems installed after December 31, 2025. New Jersey programs that remain:

• SuSI Program, ADI sub-program. The Successor Solar Incentive Program started August 28, 2021, replacing the older SREC program. Residential net-metered systems of any size get a fixed Administratively Determined Incentive, paid per megawatt-hour of solar output as an SREC-II, for a 15-year term. A BPU order of May 21, 2026 cut the residential level from $85 to $77 per MWh for registrations received on or after July 27, 2026. Systems registered before that date keep the earlier level under the program’s fixed-term design. The ADI is allocated in annual megawatt blocks, and the residential block was on track to exceed its allocation in Energy Year 2026 before the BPU added 35 MW in April 2026. Check the BPU for open capacity before signing.
• Sales tax exemption. The Division of Taxation lists solar energy systems that generate electrical power, including storage devices, as exempt from sales tax.
• Property tax exemption. Under N.J.S.A. 54:4-3.113, property certified as a renewable energy system is exempt from taxation, so the added assessed value from the system is excluded. The owner applies to the local assessor with a certification form.

What it means for payback

Net metering at full retail credit means a system sized to annual use is valued at the retail rate for most of what it produces, over the year. The year-end surplus is paid at avoided cost rather than retail, so oversizing does not pay. The ADI adds a second income stream tied to output, and its lower residential level since July 27, 2026 means that stream is smaller than it was a few months earlier. The tax exemptions lower the upfront cost and keep the property tax bill from rising. The main uncertainty is policy: a change to net metering for new customers would affect payback more than any other factor.

Other rules worth knowing

The ADI rate is set at registration and holds for the 15-year term, so timing the registration matters while rates and capacity blocks change. Community solar and remote net metering follow separate ADI levels and are not covered here.