Most homeowners are often unaware of how much are solar panels in New Jersey and its impact on their property values.
For this reason, our New Jersey real estate law firm has prepared this blog to explain to those interested everything they need on this subject. Call us today for advice on your real estate needs.
Table of Contents
How Much Do Solar Panels Cost In New Jersey And Is It Worth It In 2023?
The price of solar panels depends on the amount needed for a house. However, on average, a homeowner in New Jersey can pay around $13,500 for a solar energy system after considering the Solar Investment Tax Credit (ITC).
In the event that this tax credit is not available, that same solar panel system could possibly cost you more than $20,000. It should be noted that the price can vary widely, being higher or lower, since it all depends on the size of the system.
Beyond this, due to rising electric bills and high temperatures in recent years, it may be worth considering a solar panel system.
In these urgent times, full of fierce and extreme weather, it is propitious to have good insurance to respond to any unfavorable eventuality. For example, having good flood insurance in New Jersey.
What Is The Solar Investment Tax Credit?
According to the Solar Energy Industries Association (SEIA), the Solar Investment Tax Credit (ITC) is a federal policy instrument to support the growth of solar energy in the United States.
The ITC was promulgated in 2006, resulting in an exponential growth of solar energy to date. To sum up:
- The ITC is a 30% tax credit for individuals who install solar panels on residential properties (pursuant to Section 25D of the Tax Code).
- Commercial credit under Section 48 can be applied to both commercial solar systems and large-scale solar farms.
- According to SEIA, the residential and commercial ITC has helped the US solar industry grow more than 200 times since it was implemented in 2006.
- In the year 2022, an extension of the ITC was issued, which provides some market certainty to companies, so that they make long-term investments. This is in order to drive technological innovation and reduce energy costs.
- Despite all this progress, solar currently only accounts for 3% of US energy production.
Are Solar Panels In New Jersey Worth It?
In addition to asking how much solar panels cost in New Jersey, the first thing to consider is whether they are worth it. Generally speaking, solar panels are worth the money for most New Jersey homeowners. This is because on average, individuals with solar power can save between 40% and 50% per month on their electricity costs.
As if that were not enough, investing in these systems brings with it a fairly large reward, since:
- They can save money on their electric bills for years.
- Allows homeowners to generate passive income through net metering.
- Significantly increases the resale value of the home.
Although these kits bring with them a wide range of benefits, it is important to make sure that the residence is suitable for installing a solar panel kit. In addition, it is crucial to do all this with experts and not fall for false promises.
For example, in New Jersey, there is a false claim that the government is handing out a $2,000 check for simply going solar. This is totally false, since neither the state nor the federal government give away money for installing clean energy.
If you are about to enter this world of clean energy or increase the value of your home, do not hesitate to contact us. Our team of professionals will help you from learning what a New Jersey home appraisal is to selling a house in New Jersey.
How Much Are Homes With Solar Panels In New Jersey?
On Zillow, prices for New Jersey homes with solar panels range from $270,000 to $1,100,000 or more. It should be noted that this price may vary depending on certain factors, such as:
- House size.
- Quantity of solar panels.
- The types of houses in New Jersey.
- Other characteristic factors of the property.
Whatever the reason for the price, it is important to know how to buy a house in New Jersey. In our blog, you will find all the information required for this aspect.
Do Houses With Solar Panels In New Jersey Sell Faster?
According to Forbes magazine, it has been shown that houses with solar panels can sell up to 20% faster than houses without them.
This makes renewable energy systems an excellent option for all property owners who want to maximize their energy savings.
What Is The Average Cost Of A Single Solar Panel?
A monocrystalline photovoltaic panel usually averages between $250 and $400, having a power rating of 380 to 420 watts.
So, assuming you buy a single panel for $400, adding additional components such as labor, permits, installation and others, could be around $1,000.
Large homes typically require more than 30 panels. So if each individual panel is around $1,000 to install, your cost could be well over $30,000. Either way, the following factors affect the price of the system:
- Whether it is on the roof of a property or mounted on the ground.
- The complexity of the design.
- If you have batteries or are off the grid.
- Whether or not you need upgrades to the electrical system.
- Other variables that affect the price.
Keep in mind that each system is designed to meet an individual’s needs and budget, so the price and number of panels used will always vary.
Why Shouldn’t The Cost Of Solar Panels Be The Only Consideration When Purchasing These Systems?
The main difference between buying solar panels compared to other elements is that this equipment usually lasts between 25 and 30 years. This is a long time, so you will need customer service and maintenance for that entire period of time.
As a result, large installation companies often do not provide the necessary support to their customers, as they have too many to keep track of. For this reason, it is advisable to look for a small to medium solar company, as they tend to care more about their customers.
What Other Factors Affect The Cost Of Solar Panels In New Jersey?
The total cost of a solar energy system does not only include the costs of the equipment and its installation, since there are also other components that add the cost to the system. Total costs include:
- Solar panels.
- Complete installation.
- Permits and inspections.
- Sales and Marketing.
- Non-selling expenses.
These aspects make the cost of the renewable energy system fluctuate so much between installations. Other items that can alter the cost of the system include:
- Federal, state and local incentives,
- The quality of the solar installation, and
- The type of solar panels. For example, if they are monocrystalline or polycrystalline, the former being the most expensive.
The type of inverter purchased can also influence cost, along with whether or not lithium batteries are needed.
Do Solar Panels Increase Home Value In New Jersey?
Solar panels increase the value of a New Jersey home for every kilowatt of solar capacity generated by this system. According to a report from the Appraisal Institute, for every KW the panels have, the home’s value could rise to more than $6,000.
It must be taken into account that:
- Often a residential solar installation is around 5KW, this could increase a home’s value to $30,000.
- As if that weren’t enough, the home’s value could also increase by $20 for every $1 reduction in electric bills.
- If the latter applies, it could mean that if the renewable energy system helps homeowners save $600 a year, the value of their home could increase to $12,000.
- Likewise, in a survey conducted by Zillow, in 2021, it was determined that 67% of home buyers were looking for an energy efficient home.
- Additionally, these buyers were willing to pay 4.1% more for panel homes.
In another study conducted by the United States Department of Energy (USDOE) Lawrence Berkeley National Laboratory (LBNL), it was found that buyers could pay more than $15,000 for homes with solar panels.
Now that you have an estimate of how much solar panels cost in New Jersey and how much value it adds to a property, you may be interested in learning how much value a deck adds to a home.
Can I Take My Solar Panels With Me If I Move House?
The vast majority of solar panels are transferable. In other words, an owner can move house and perfectly take their solar panels with them, giving them the opportunity to continue saving on electric bills.
However, it must be taken into account that making this transfer usually involves a cost. This is because the panels need to be removed, paid for by a removal service, and then installed again.
As is customary with most transfers, a fee must always be paid. This also occurs with real estate transfers. For more on this, visit our New Jersey Real Estate Transfer Fee blog.
Does New Jersey Have A Solar Tax Credit?
Although installing a solar power system requires a fairly high initial investment, there are several solar incentives available in New Jersey. Among them are:
Solar Investment Tax Credit (ITC)
As we said at the beginning of this article, the ITC grants Garden State homeowners a tax deduction equal to 30% of the cost of installing solar energy. It should be noted that this percentage can drop to 26% in 2023.
How To Apply To The ITC
To apply for the ITC, the following two requirements must be met:
- Owning a home in the United States and
- Already own solar panels.
Once these two requirements have been met, individuals will be able to claim their federal tax credit. This rule also applies to individuals who have purchased their solar energy systems in advance or have applied for a loan.
However, individuals who have leased or have a Power Purchase Agreement (PPA) will not qualify for this federal incentive.
To claim the credit, homeowners must file Internal Revenue Service (IRS) Form 5695 as part of their tax return.
Successor Solar Incentive (SuSI)
The SuSI program, or SREC-II, is the successor to the Solar Renewable Energy Certificate (SREC) program. This program generates a credit for each MWh of energy produced in a solar energy system.
An individual can often earn $90 for each SuSI or SREC-II credit and will be able to sell these credits for income.
How To Apply For SuSI
To apply for this program, owners of residential solar panels must complete a registration with the Administratively Determined Incentive Program (ADI).
New Jersey Net Metering
New Jersey is one of many states in the US that has a net metering program. Net metering makes it possible to sell excess electricity generated by solar panels and supplied to the national electricity grid.
Those who benefit from this incentive will receive credits on their future electricity bills for each kWh they have produced. For this to be true, the solar energy system must be an “On Grid” one.
How To Apply To Net Metering
The requirements of this program vary depending on the utility provider, since not all electricity companies offer money in exchange for the kWh produced.
However, the New Jersey Clean Energy Program website offers several guidelines to consider from different utility providers.
Solar Sales Tax Exemption
In New Jersey, equipment purchased for a solar energy system is exempt from state sales tax, which is 6.625%.
How To Apply
To apply for this incentive, individuals must complete the New Jersey form and submit it to the seller in lieu of paying sales tax.
Property Tax Exemption
Solar panels increase property values. However, homeowners do not need to pay additional taxes as there is a tax exemption for solar property.
How To Apply
To apply for this exemption, individuals must request a certificate from their real estate advisor. Thanks to this certificate, for tax purposes, the property will return to its previous value, that is, before the renewable energy system was installed.
Do you want to install solar panels in your business and have legal problems? Don’t worry, at Curbelo Law you may contact our commercial real estate attorney in NJ. We can help you on all these issues.
How Does The Cost Of Solar Panels In New Jersey Compare To The National Average?
New Jerseyans typically pay an average of $13,500 for their solar energy system with the tax credit. However, the national average cost of solar panels is just over $16,700 with the federal credit.
On the other hand, without the ITC, the price in New Jersey is over $19,000 on average, and for the national average, it is over $23,900.
Although the total cost per solar investment is cheaper in New Jersey, the price per watt is much higher. For example, the cost per watt in this state is $2.77, while the national average is $2.66.
The good news is that even though the price of watts is above the national average, in the Garden State it won’t take many panels to make up for power consumption.
How Much Can I Save By Going Solar In New Jersey?
New Jerseyans save on average about $23,000 on electric bills over the life of solar panels. However, this is only after the panels start to pay for themselves.
Taking into account that the cost of doing nothing, that is, sticking with the electric bill, in New Jersey, your average cost is around $43,100.
As we have seen, solar panels are a great investment for a property in every way, but some care must be taken with taxes. This is because there is a New Jersey mansion tax on certain high value properties.
Should I purchase Or Take Out A Loan For Solar Panels In New Jersey?
Typically, when you buy a solar system outright, the payback period is shorter and the savings are more significant in the long run. This occurs because the owner will not pay interest on a loan.
In short, a full purchase could greatly maximize the benefits to be gained from the use of a solar power system. Notably:
- All New Jersey solar tax incentives are available to individuals who purchase these panels.
- Unlike leases, buyers will have all the federal incentives.
- The main drawback of purchasing the panels is that there is a higher initial outlay in the budget. For example, most individuals cannot justify paying $19,000 up front.
On the other hand, solar panel loans are usually a much more affordable method for in-state residents. This is because financing significantly reduces startup costs, even down to $0.
The problem is that, as with all loans, financing costs will be paid in the form of interest. Thus, the long-term cost could increase significantly. As if that were not enough, the loans are not available to everyone, since eligibility is based on the credit of the individuals.
An Experienced Real Estate Attorney At Your Disposal
Now that we know how much solar panels cost in New Jersey, you should understand that navigating all these processes can be complex and confusing. All this is because there are a large number of documents that must be verified.
In New Jersey, there are several cases of solar panel fraud by alleged affordable energy companies.
For this reason, it is essential to have the help of our lawyer Carolina T. Curbelo, since she will evaluate and examine all the documents submitted. Likewise, our lawyer will analyze the best properties to consider in the state.
For this and much more, leave us the hard work of doing all the legal processes for you. Call us, send us an E-mail or schedule an appointment with our office, located in Ridgewood, New Jersey.