What is the SREC II program in New Jersey?

SREC II (Successor Solar Incentive) is New Jersey's primary solar incentive program, replacing the original SREC program. Under SREC II, solar system owners earn Solar Renewable Energy Certificates (SRECs) for every 1 MWh of solar generation. These SRECs are sold to utilities that must meet New Jersey's solar carve-out under the Renewable Portfolio Standard. SREC prices vary based on supply and demand but have historically ranged from $100–$230 per SREC in New Jersey.

What licenses are required for solar installation in New Jersey?

New Jersey requires Home Improvement Contractors (HIC) registration and a licensed electrician (either a New Jersey Electrical Contractor or a licensed electrician employee of the HIC). For systems requiring structural work, a licensed home improvement contractor is needed. NABCEP certification is highly valued but not required by the state.

How does the NJ solar application process work with utilities?

New Jersey utilities — PSE&G, JCP&L, ACE (Atlantic City Electric), and Rockland Electric — use the NJ BPU's standardized interconnection rules. All four utilities have online interconnection portals. Residential applications under 10 kW are processed in 20–30 business days. Larger systems go through a more detailed process with potential interconnection studies.

What is the Transition Incentive Program (TI) in New Jersey?

The Transition Incentive (TI) program bridged SREC and SREC II. Systems registered under TI earn a fixed incentive rate rather than market-priced SRECs. TI registration is now closed — new systems register under SREC II. Systems on TI continue to receive their fixed rate for the duration of their 15-year contract.

New Jersey Solar Compliance Guide 2026: SREC II, Net Metering & BGS

Q: Does New Jersey have retail-rate net metering?

Yes. New Jersey requires investor-owned utilities to offer net metering at the full retail rate for excess solar generation. Net metering applies to systems up to 2 MW. Credits from net metering accumulate over the year, and at the year-end true-up, customers receive cash payment at the avoided cost rate for any remaining net excess generation — not forfeited like in some other states.

New Jersey is the Northeast’s strongest solar market and one of the top 10 US states by installed solar capacity. What makes New Jersey unique is the combination of retail-rate net metering AND SREC revenue — solar owners earn money from two separate programs simultaneously, which produces some of the best residential solar economics on the East Coast.

NJ Solar Market Strength

New Jersey has over 5 GW of installed solar across residential, commercial, and utility segments. The state’s Renewable Portfolio Standard requires 35% renewable energy by 2025 and has a strong solar carve-out that drives SREC demand. NJ ranks top-5 nationally in solar installed per capita.

SREC II: The Core NJ Solar Incentive

Solar Renewable Energy Certificates (SRECs) are New Jersey’s signature solar incentive. Every 1,000 kWh (1 MWh) of solar generation creates one SREC. Utilities that don’t meet the state’s solar carve-out must buy SRECs from generators — creating a market.

SREC II Program Details

Feature	Details
Certificate rate	1 SREC per 1 MWh of generation
Contract duration	15 years (administrative accounting period)
SREC price	Market-driven; historically $100–$230/SREC in NJ
Compliance obligation	Set by NJ BPU annually based on RPS solar carve-out
Registration	NJ SREC Registration Program (SRP)

SREC Revenue Calculation

Example: 7 kW residential system producing 8,400 kWh/year:

Annual SRECs = 8,400 kWh / 1,000 = 8.4 SRECs/year
At $175/SREC = 8.4 × $175 = $1,470/year SREC revenue

Combined with net metering savings, SREC revenue can generate $2,000–$3,500/year in total benefits for a typical NJ residential system, creating payback periods of 5–8 years on a $20,000–$25,000 system.

SREC Contracts vs. Spot Market

New installers can offer customers either a broker agreement (spot market SREC sales) or a utility purchase agreement through the SRP program. Spot market sales get current market price but expose customers to price volatility. Fixed-rate contracts offer certainty but may be below current market prices if SREC prices are elevated. Model both scenarios for customers — the difference in NPV can be meaningful over 15 years.

New Jersey Net Metering

NJ net metering is retail-rate and applies to all systems up to 2 MW:

Feature	NJ Net Metering Rule
Rate	Full retail rate
System size	Up to 2 MW
Monthly credits	Roll over month to month
Annual true-up	Cash payment at avoided cost for net excess
Applicable utilities	PSE&G, JCP&L, ACE, Rockland Electric

The cash payment at year-end for net excess generation (at avoided cost, typically $0.05–0.07/kWh) is a favorable feature that distinguishes NJ from states that simply forfeit excess credits. It means overproduction in sunny months can still generate some revenue, even if below the retail rate.

NJ Utility Interconnection

All four NJ IOUs follow the BPU’s standardized interconnection procedures:

Utility	Service Territory	Online Portal
PSE&G	Northern NJ (Newark, Jersey City area)	pseg.com/solar
JCP&L	Central NJ (Monmouth, Ocean County)	jcpl.com
ACE (Atlantic City Electric)	Southern NJ	atlanticcityelectric.com
Rockland Electric	Sussex/Passaic counties (NW NJ)	rocklandelectric.com

Typical residential processing time: 20–30 business days for systems under 10 kW. Commercial systems 10 kW–300 kW: 45–60 days. Systems requiring interconnection study: 90+ days.

NJ Incentives Summary

Incentive	Amount	Notes
Federal ITC (30%)	30% of system cost	All NJ solar customers
SREC II	Market price (~$150–230/SREC)	15-year earning period
Net metering	Retail-rate credits + annual cash settlement	All IOUs
NJ Property Tax Exemption	Full exemption	Solar adds no property tax value
NJ Sales Tax Exemption	6.625% state sales tax exempt	Solar equipment purchases

New Jersey does not have a state income tax credit for solar. The SREC program and full property/sales tax exemptions are the primary state-level incentives.

AHJ Permitting in New Jersey

New Jersey building permits are issued by individual municipalities (cities, townships, boroughs). NJ is currently on NEC 2017 as the statewide electrical code adoption, though some municipalities may be ahead.

Major Market Notes

Market	Permitting Authority	Notes
Newark	City of Newark	Urban rooftop market; lead certification requirements
Jersey City	Jersey City Building	Active solar market; PSE&G territory
Trenton	City of Trenton	BPU headquarters city; active solar programs
Edison	Edison Township	One of the larger NJ residential markets
Cherry Hill	Cherry Hill Township	Active ACE-territory residential market

NJ permit packages typically require:

Electrical one-line diagram with NEC 690 calculations
Roof framing plan or structural letter
Equipment cut sheets (modules, inverter, racking)
Site plan

Model NJ SREC + Net Metering Combined Returns

SurgePV calculates NJ SREC revenue projections, net metering savings, and IRA ITC to show customers the full financial picture on a single proposal page.

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Frequently Asked Questions

What is SREC II in New Jersey?

SREC II is NJ’s Solar Renewable Energy Certificate program. Solar owners earn 1 SREC per 1 MWh of generation and sell them to utilities on the SREC market. Prices have historically ranged from $100–$230 per SREC in NJ, generating $1,000–$2,000/year for a typical residential system over a 15-year earning period.

Does New Jersey have retail-rate net metering?

Yes. NJ utilities provide retail-rate net metering credits, with a year-end cash settlement at avoided cost for net excess generation. Credits don’t simply expire — the annual true-up provides a small cash payment for overproduction.

What licenses are needed for solar installation in NJ?

Home Improvement Contractor (HIC) registration plus a licensed electrician (NJ Electrical Contractor or licensed electrician on staff) are required. NABCEP certification is widely valued but not legally required.