By Sudeep S – Electrical Engineer & Solar Expert
New Jersey has become one of the top solar-friendly states in the U.S. With solid sunshine levels, supportive state policies, and rising utility rates, more homeowners are investing in solar energy systems to cut costs and reduce dependence on the grid.
But one question always comes first — how much do solar panels actually cost in New Jersey in 2025?
As an electrical engineer and solar consultant who has overseen numerous residential and commercial installations, I’ll break down the average prices, what drives those costs, how incentives reduce them, and how much savings you can expect.
Average Solar Panel Cost in New Jersey (2025)
In 2025, homeowners in New Jersey can expect to pay around $2.50 – $3.25 per watt before incentives. That means:
- A 5 kW system typically costs between $12,500 – $16,250
- A 7 kW system costs between $17,500 – $22,750
- A 10 kW system costs between $25,000 – $32,500
After applying the 30% Federal Investment Tax Credit (ITC), the cost drops significantly:
| System Size | Before Incentives | After 30% Tax Credit |
|---|---|---|
| 3 kW | $8,000 – $9,500 | $5,600 – $6,650 |
| 5 kW | $12,500 – $16,250 | $8,750 – $11,375 |
| 7 kW | $17,500 – $22,750 | $12,250 – $15,925 |
| 10 kW | $25,000 – $32,500 | $17,500 – $22,750 |
These figures represent the average turnkey installation cost — including panels, inverters, wiring, labor, permits, and inspection.
Why Solar Costs in New Jersey Vary
The price you’ll actually pay depends on several key factors:
1. System Size
The larger your system, the higher the total cost — but the lower the price per watt. A 10 kW system might cost more upfront than a 5 kW system, but it provides greater long-term savings.
2. Equipment Quality
Premium panels like SunPower, REC, or Q Cells tend to cost more than standard options. Similarly, micro-inverters or hybrid inverters with battery compatibility can increase the system’s price.
3. Roof Design & Condition
A simple, unshaded, south-facing roof is ideal. However, if your roof is steep, old, shaded, or has multiple angles, the labor and racking costs increase.
4. Local Labor & Permit Fees
Labor costs in New Jersey are slightly higher than the national average, and municipal permit fees can vary by city.
5. Battery Backup
Adding battery storage (like Tesla Powerwall or Enphase IQ Battery) can increase your total project cost by $7,000 – $15,000, depending on capacity.
6. Installer Reputation
Top-rated installers may charge a premium, but they also provide better workmanship, warranties, and long-term reliability.
How Incentives Lower Your Cost
New Jersey homeowners can benefit from several strong incentives in 2025:
1. Federal Investment Tax Credit (ITC)
You can deduct 30% of your system cost from your federal taxes if you own the system (purchase or financed through a solar loan).
2. SuSI Program (Successor Solar Incentive)
The SuSI Program provides performance-based incentives for every kWh your system produces over 15 years. It replaces the earlier SREC program and adds long-term value to solar installations.
3. Property Tax Exemption
Solar panels are exempt from property tax increases — meaning even though your home’s value rises, you don’t pay additional property tax for the added solar value.
4. Sales Tax Exemption
Solar energy systems are exempt from New Jersey’s 6.625% sales tax, which saves hundreds of dollars upfront.
Solar Payback Period in New Jersey
New Jersey’s electricity rates are higher than the national average, which makes solar even more financially attractive. Most homeowners see payback within 6 – 9 years, depending on consumption and system size.
Let’s look at a real-world example:
- System Size: 7 kW
- Cost after ITC: ~$14,000
- Average Annual Savings: ~$1,700
- Payback Period: ~$14,000 ÷ $1,700 ≈ 8.2 years
After the payback period, homeowners can enjoy free solar electricity for another 15–20 years — typically saving between $40,000 – $60,000 over the system’s lifetime.
Regional Price Variations in New Jersey
Even within New Jersey, costs can differ slightly:
- North Jersey (Bergen, Hudson, Passaic): Slightly higher labor and permit costs, but dense rooftops allow for easy installations.
- Central Jersey (Middlesex, Monmouth): Moderate costs with strong installer competition.
- South Jersey (Camden, Burlington, Atlantic): Lower costs due to easier permitting and more installation space.
Urban areas tend to have slightly higher prices ($3.00 – $3.50/W), while suburban or rural areas may average closer to $2.50 – $2.75/W.
Solar Savings Over 25 Years
Let’s assume a typical 7 kW system produces 9,000 kWh per year and electricity costs $0.18 per kWh.
Yearly Savings: 9,000 × $0.18 = $1,620
25-Year Lifetime Savings: $1,620 × 25 = $40,500
As utility rates rise 2–3% each year, your savings actually grow over time.
Even factoring in inverter replacement or minor maintenance after 12–15 years, the net ROI remains very strong.
How to Get Accurate Solar Quotes
To ensure you’re getting a fair deal, I always advise homeowners to:
- Request 3–4 Quotes: Compare cost per watt, total system size, and warranty coverage.
- Ask About Equipment Brands: Panel and inverter type affect performance and warranty.
- Verify Production Estimates: Ensure the installer provides a kWh estimate for your location.
- Understand Incentives: Make sure your proposal clearly lists the 30% ITC and any local incentives.
- Review Warranties: Look for at least 25 years on panels and 10–12 years on inverters.
- Check Roof Condition: Replace your roof before installing solar if it’s nearing the end of its life.
Financing Options in New Jersey
You don’t need to pay cash upfront to go solar. There are three main ways to finance your system:
1. Cash Purchase
You pay the full amount upfront, claim the 30% ITC, and enjoy the best return on investment.
2. Solar Loan
Low-interest solar loans spread payments over 5–15 years while allowing you to claim the tax credit.
3. Solar Lease or PPA
You pay nothing upfront but lease the system or buy power at a lower rate than your utility. However, the installer keeps the tax credit and long-term benefits.
If you can afford to buy or finance, ownership is usually the smarter choice.
Why New Jersey is Perfect for Solar
- Strong Incentives: Federal ITC + SuSI + state tax exemptions.
- High Utility Rates: Solar offsets expensive grid power.
- Moderate Sunlight: Over 4.5 peak sun hours/day, ideal for residential solar.
- Home Value Boost: Homes with solar systems often sell faster and for higher prices.
- Environmental Impact: Every kW installed offsets about 1.5 tons of CO₂ per year.
Challenges to Keep in Mind
- Roof Condition: Installing on a weak or aging roof can lead to extra future costs.
- Shading: Even minor shading can reduce efficiency by 10–20%.
- Installer Quality: Choose experienced, licensed professionals — avoid low-ball quotes.
- Policy Changes: Keep updated on state programs like SuSI or net-metering adjustments.
- Battery Costs: Storage is beneficial but adds cost; evaluate need vs budget.
Professional Opinion: My Take on 2025 Solar Market in NJ
From my professional experience, 2025 is an excellent year for New Jersey homeowners to go solar. Costs have stabilized after several years of decline, while incentives remain generous. The federal ITC is still 30%, and electricity rates continue to climb.
An average 7 kW system that costs around $14,000 after incentives could pay for itself in 8 years and generate free electricity for another 17+.
If you’re planning to stay in your home for 10+ years, solar in New Jersey offers one of the best returns on investment of any renewable energy option in the U.S.
Final Thoughts
Solar energy is no longer a futuristic idea — it’s a proven, financially sound solution for homeowners across New Jersey. The upfront cost is balanced by years of savings, cleaner energy, and greater independence from rising utility bills.
My advice is simple:
Do your research, get multiple quotes, and focus on quality installation and equipment. Solar is an investment in both your finances and the planet’s future.
Disclaimer
The information shared in this article is based on general market research and engineering experience. Prices, incentives, and policies may vary by region, installer, and time. This content is for informational purposes only and does not constitute financial or installation advice. We are not affiliated or associated with any specific solar company or vendor mentioned herein. Always consult certified professionals before making purchase or installation decisions.