16,250. A total purchase of a solar system in New Jersey will technically provide the biggest financial return and will pay itself off in a few years due to available rebates and tax credits. Over 25 years, your system will have produced nearly $35,000 in income, after your system cost is paid back. In addition, New Jersey offers an incentive called Solar Renewable Energy Credits (SREC), in which case one SREC represents one megawatt of electricity generated from solar, and in New Jersey, you get about 6 per year, equaling about $1,000 in your pocket every year. However, a majority of people do not have the $16,250 to buy a solar system upfront, but there are solar loan options available.
Solar loans: These are the best option when it comes to the percentage return on your investment. This is because you are using someone else's money for the purchase price, which is then paid back over time. If you have equity in your home or can get a large loan with an interest rate of 5% or less. You will also receive the 30% federal tax credit and the energy bill savings that come along with it. However, your loan payments will initially be higher than the energy bill savings, but the difference will come down each year as electricity prices rise. Currently, the net present value of solar investments in New Jersey is +$14,478 for solar loans and +$11,365 for solar purchase.
Solar PPA: A power-purchase agreement is definitely the cheapest and easiest way to get involved with solar. With a power-purchase agreement, you are leasing solar panels from a third party solar company. You put $0 down and pay about $796 per year. With this option, you save about $140 because you would normally pay $936 to the utility company. The perk of doing a PPA is that since the company owns the panels, they will do all the maintenance for you and will take care of any problems. However, in New Jersey, a PPA has the lowest NPV at +$2,239.
When it comes to the availability of access to solar power, state legislatures, and public utility commissions can enact rules to make solar power accessible for everyone. Luckily, New Jersey has some of the best solar policies out there. There are four main categories of rules and policies to know:
Renewables Portfolio Standard (RPS): This requires utilities in the state to eventually source at least a certain percentage of their electricity from clean, renewable sources like solar. New Jersey has one of the strongest RPS goals in the nation, stating that 22.5% of all energy must come from renewable sources by 2021. Out of this 22.5%, 4.1% must come from solar, which means that solar is crucial in order to meet requirements. This is great because it forces the usually unwilling utility companies to aid in the transition to solar.
Electricity Price: Currently the average price of power in New Jersey is about $0.16 for a kilowatt-hour of electricity, which is about 3 cents more expensive than the national average. Although this seems unfortunate, the higher electric prices could mean even larger savings if you switch to solar power.
Net Metering: This requires your utility company to monitor how much energy your solar power system produces and how much energy you consume. They use this to make sure that you get the full retail rate for any surplus energy you produce. This credit is applied to your bills for up to 12 months. At the end of the 12 months billing period, they pay you for any remaining energy at an avoided-cost rate. New Jersey has a pretty ideal net metering policy.
Interconnection Policies: Interconnection policies allow you to connect to the electrical grid with solar panels on your roof. If you are looking to have solar panels on your single home, you should have no problem connecting, with no application fees, if your system is 10kw or less. If your system is larger than 10kw, you will not be required to install a redundant external disconnect switch or be required to purchase additional liability insurance. Overall, New Jersey has pretty smooth and easy interconnection policies.
When it comes to the perk