Momentum powers the state of New Jersey.

You’ve probably seen a few solar panels installed on rooftops in your neighborhood. Perhaps you’re wondering how these panels convert the sun’s rays to clean, renewable solar energy. The process behind solar energy generation is remarkably simple.

When sunlight hits the photovoltaic (PV) panels, electrons become excited, creating a direct current (DC) of electricity. This current is fed into an inverter, which converts DC electricity into alternating current (AC) electricity so it can be used by appliances in your home.

A meter installed on the system keeps track of the amount of energy generated and consumed by your home. Since New Jersey supports net metering, any electricity that you do not use will be fed back into the grid and credits will be issued for your surplus.

New Jersey is one of the few states that can guarantee most homeowners will actually make money from their solar systems immediately. This is because New Jersey offers an incentive called the Transition Renewable Energy Credit (TREC).

For the first 15 years of owning solar panels, homeowners can earn 1 TREC for every MWh (or 1,000 kWh) of electricity generated. Once a TREC is generated by your system, it is sold to one of the utilities companies in New Jersey for roughly $90. On average, a NJ homeowner should expect to generate 8 TRECs per year, which equates to a little over $700 of extra income annually.

In addition to TRECs, solar homeowners will also be saving money on their electric bill each month – and once the system is paid for, it’s all savings from there. But let’s not get ahead of ourselves – let’s look at some numbers to demonstrate our point.

If you are able to purchase your system outright, you’ll benefit from the greatest amount of savings – approximately $37,000 over 25 years!

• The cost to install a typical 5-kW solar panel system in New Jersey is about $16,250. With the federal solar investment tax credit (ITC), you can reduce the cost of your system by 30%, bringing your initial installation cost to $11,375.
• You can expect your electricity savings to be around $950 during the first year of operation. With SRECs you’ll get around $1,200 in cash.
• Using these numbers, your system will quickly pay for itself in just 6 years. Over the lifetime of your system (approximately 25 years), you can expect to save at least $24,000 after your system is paid for! Since this doesn’t take into account the rising costs of electricity, we expect your savings to be even greater.

If you don’t have the money to purchase a system outright or sufficient equity in your home, a third option for benefiting from solar energy is through a Power Purchase Agreement (PPA). Also referred to as a “solar lease,” in this arrangement a third party will own, install, and maintain the solar panels on your roof. Through a PPA, you can get solar installed in your home for $0 down and benefit from cost savings from day 1.

You’ll pay a fixed rate for the energy produced by your panels, which should be around $800 per year. This amount will be lower than what you’d pay for energy from the grid. For the average household, the savings will equate to about $150 per year.

This might not sound like a lot of money right now, but your price her kWh will be fixed from day 1, so you won’t be subject to electricity price hikes in the future. Over a 20-year PPA, we estimate that you’ll save about $4,500 when taking the rising costs of electricity into consideration.

New Jersey offers some of the most motivating incentives to its residents to go solar. These programs are part of the reason why solar has been adopted at such a high rate in the state. While some of the early rebates are no longer offered, other generous policies continue to encourage high numbers of homeowners to convert to solar.

New Jersey homeowners who wish to purchase solar panels qualify for the federal Investment Tax Credit (ITC), which essentially lowers the cost of the system by 30%. The refund is claimed as a tax credit, reducing the amount of income tax you owe by the equivalent of 30% of the cost of your system. If you don’t have a high enough tax liability in the purchasing year, you can roll it over to the next year. But you need to act soon to take advantage of this incentive – after this year, the program is being stepped down until it is eventually phased out in 2022.

As discussed above, TRECs are a major incentive for installing a home solar energy system in New Jersey. For every MWh (megawatt-hour) that your panels produce, you will receive one TREC. TRECs are then sold back to the utilities to help them meet the renewable energy standard required by New Jersey. The prices vary based on supply and demand, ranging anywhere from $170 to $260. This means that if you have a typical 5-kW solar system installed, you can expect to get a cash bonus of $850 – $1,300 each year!

In addition to these incentives, New Jersey also has some tax policies in place to help homeowners keep the overall cost of owning a solar panel system down.

• Solar sales tax exemption: Sales tax does not apply to home solar systems, so you won’t have the typical 7% sales tax added to the purchase of your system.
• Property tax exemption: While solar panels will increase the value of your property, you will not have to pay any additional property taxes as a result of the increased value of your home after having solar installed.

At Momentum Solar, our mission is to make it easy for homeowners to go solar. From your first contact with our company, our aim is to provide valuable information to simplify the decision-making process for you. Our support extends to each step of your solar journey – from planning and pricing your system, to researching the best way to finance your investment, to providing seamless installation and five-star support after your solar system is up and running.

Our solar PV panels have been given a Tier 1 quality rating, which indicates they are in the top class of panels available in the US today. We are so confident in our product that we offer our customers a 25-year warranty on the panels and system. If you experience problems, we will be there to sort them out quickly.

With 10 years of experience installing solar in New Jersey, our solar installers knows the demands of the market. We understand the latest rebates and incentives and can help you navigate the process with ease. If you’re ready to learn more about solar, we invite you to contact us for a free, no-obligation consultation and quote today!

Resources

1. https://en.wikipedia.org/wiki/Solar_power_in_New_Jersey
2. https://www.seia.org/state-solar-policy/new-jersey-solar