How to Use the Solar Calculator
The best way to learn about local rebates, your home’s energy potential, and your eventual return on investment is to use our ModSun Solar Cost Calculator (see above). Enter your home address in the box, then click Check My Roof. You’ll get an instant picture of your roof’s productivity, your average energy expenses, and installation costs in your area—whether you decide to buy or loan. We’ll also provide system size recommendations and information about rebates and incentives you may be eligible for. Just select More Info under each purchasing strategy to learn more, and then connect with a solar pro.
Solar State Buying Guide for New Jersey
New Jersey residents considering the installation of solar power in their home or business can tap into many benefits available in the area to reduce the upfront costs associated with this project. Important decisions must be made before starting this project including hiring a contractor, obtaining necessary permits and selecting financing options. This Solar Buying Guide will introduce you to the basics of solar power, the process required for installation as well as some resources that can reduce the upfront costs of a solar panel installation in New Jersey.
Use the list below to navigate quickly between sections within the article.
- Introduction to Solar
- HOA’s and Solar
- Net Metering
- Solar Renewable Energy Certificates
- Solar Warranties
How Solar Energy Produces Electricity for New Jersey Homes and Businesses
Solar energy refers to electric or thermal energy produced from the light or heat from our sun. Solar panels use arrays of photovoltaic “PV” cells to convert the suns clean renewable energy — photons — into usable electricity. Residential and commercial solar energy systems are most often mounted on the rooftops of buildings but can be mounted on the ground as well. Typical systems generate an average of between 2KW and 10KW. This will depend on the size of the system, where it is located, as well as the annual weather conditions. Since solar panels produce direct current, an inverter is required to convert the DC current into “AC” or alternating current.
Solar power is also a viable option for domestic hot water production. These systems, which use thermal energy from the sun to heat water, reduce utility costs and have a positive impact on the environment.
- Active system – This system uses a series of pumps and controls to maneuver water circulation. The water heater is installed on the roof where water is collected and heated. It then moves through the system to a storage tank.
- Indirect system – This system does not rely on controls or pumps. Instead, it uses a specially designed heat-transfer fluid resistant to freezing. It makes its way through the system’s collectors to the heat exchanger where the water is heated and available to the home. For climates prone to wintertime freezing temperatures, this system is the recommended choice.
Solar Panel Installation Requires a Permit in New Jersey
Building permits and/or electrical permits are required to install solar panels in New Jersey in accordance with the New Jersey Building Code. Since the permits are issued on the city or county level, the homeowner or solar contractor will need to apply for them through their city or county building department. While, your solar contractor should roll the costs of the necessary building permits into your initial estimate, it would be beneficial to verify this with them before starting the project.
A contractor suggesting they can bypass the permit process should raise a red flag with you. The permit process is beneficial as it ensures that your system is installed correctly and safely in your home. Inspections are required prior to and after installation is complete. Due to the weight of the solar panel equipment, your property must be inspected to ensure the roof can sustain the weight. This means, the roof must be structurally sound in order to install solar panels. You also have the option to install a ground-based solar panel system when land space is available. This could prove to be a valuable alternative for structures with inadequate roof support or those roofs in poor condition. For this type, the area of the property chosen for the installation must have enough room to accommodate the panels, not be located in a shady area or in an area where sunshine is blocked by other structures. The area should be a location with optimal sunlight throughout the day. Whichever type you choose, an inspection is generally done before, during and once installation is completed. Inspections are to your benefit to guarantee the panels are properly placed and installed and that the electrical wiring is up to code.
Home Owners Associations and Solar Power in New Jersey
If you live in a community subjected to the rules and regulations of a Home Owners Association “HOA” it would be wise to check with them before starting your solar project. While they cannot prevent you from installing a renewable energy system, many have strict architectural requirements that must be followed. A snafu with your HOA could delay the start of your project or lead to additional and unnecessary expenses.
Retaining the Services of a Solar Contractor in New Jersey
Without the skills, knowledge, and experience necessary to install a solar panel system on your home or business property, you would be wise to forgo the solar installation process yourself and leave it to a professional solar contractor. A solar contractor has the knowledge, experience, license and insurance coverage required by the state of New Jersey to install solar panel systems and related equipment. You can search the New Jersey Division of Consumer Affairs database to verify the status of contractor licenses by clicking here. You can also check with the BBB “Better Business Bureau” as well as the New Jersey Division of Consumer Affairs mentioned above for any complaints or recent legal actions against applicable company.
Solar Net Metering in New Jersey
During the times your solar panels produce more electricity than your home or business needs, the excess power is sent back into the grid and in effect, spins your meter backwards. Net metering or netting out your bill refers to subtracting overall electricity production from your solar panels from the amount of energy you acquire from the grid. New Jersey residents receive the full retail value—subtracted from their monthly utility bill—for excess power their panels contribute to the grid.
Most solar panel systems in New Jersey require two additional meters. The net meter mentioned above and a second meter called a production meter. This meter measures the output of your system to determine how many Solar Renewable Energy Certificates your system earns.
Solar Renewable Energy Certificates “SRECs” in New Jersey
Solar Renewable Energy Certificates place a dollar value on the benefits of renewable energy outside of the actual energy they produce. SRECs provide another avenue that can help the owner of the solar panel system to recover some of their initial investment.
New Jersey’s Renewable Portfolio Standard requires that power producers generate a certain percentage of clean, renewable energy each year. If they fall short, the power producers must purchase the SRECs from people who do to meet the state standard or face a stiff penalty.
Solar system owners receive one SREC for every 1,000KW of electricity their systems produce in the first 15 years. The certificates are deposited into an electronic account and can be accessed and monitored by the owner. The certificates are considered a market-based commodity and their price can fluctuate depending on supply and demand.
Purchasing Solar Power in New Jersey
Traditionally, installing solar panels on your home or business required purchasing the system outright. This required a substantial upfront investment that proved to be an obstacle most could not overcome. Today, other options are available that make solar power accessible to a broader base of residential and commercial customers.
- You can still buy the system outright from the installer and receive the tax incentives, SRECs and net metering benefits yourself. Many choose private financing—second mortgage, HELOC, cash or a credit card—to pay the upfront costs.
- Many forgo panel ownership and choose to purchase solar electricity produced by a system installed on their home or business through a third party who installs and maintains the equipment. Since PPA’s require little to no up-front costs to you and the equipment is owned by the third party, they receive all tax incentives and SRECs. You are required to buy the solar electricity per kilowatt-hour from the third party at a reduced rate—versus power from the main grid—over a set number of years.
- A leasing arrangement, similar to a PPA is also available to New Jersey residents and requires little to no up-front costs. Since a third party installs, maintains and retains ownership of the system, they receive the tax incentives and SRECs. The difference between a PPA and a leasing arrangement is you purchase the electricity generated from the panels at a fixed monthly price instead of per kilowatt-hour.
Solar Warranties in New Jersey
Solar panel systems in New Jersey should include a full, five-year warranty on parts and labor in addition to manufacturers’ warranties. You should pay close attention to your installation agreement to verify warranty responsibility, terms and whom to contact in case of a failure. New Jersey’s Clean Energy Program requires submission of a solar technical worksheet the outlines warranty terms and additional information that should be included in the initial registration packet.
Solar Resources in New Jersey
To help reduce the upfront costs of solar panel and/or thermal installation, there are multiple programs available through the federal government and states offering rebates, incentives, tax credits, grants, and loans. Check the websites listed below for programs available in your area:
- Energy Star – offers tax rebates on solar panels (photovoltaic cells) and solar powered water heaters. Restrictions do apply.
- Department of Energy (DSIRE) —search this list for current and/or active programs available in the state of New Jersey.
- Rural America for America Program Renewable Energy Systems and Energy Efficiency Improvement Loans and Grants – these programs are for small businesses and agricultural producers.
Along with the incentives mentioned above and according to CleanEnergy.com, New Jersey residents can benefit from the sales tax exemption—currently 7-percent—on solar heat, thermal or panels and related equipment. There is no maximum limit and the incentive applies to residential, commercial and industrial applications. In addition, New Jersey property owners receive a property tax exemption for 100-percent of the cost of their renewable energy systems and related equipment.