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How much will my solar electric system cost?

The cost of a system depends on many factors, including whether your home is under construction, if modules are being integrated into the roof or mounted on an existing roof, or if you are planning to replace your roof. Prices also vary based on the equipment options you select, the system component manufacturer and the installation costs.

The size of a system is often the most significant factor in assessing costs. Typically a residential system will cost between $8 and $10 per watt, installed. A two-kilowatt system that offsets the needs of an energy-efficient home will cost in the range of $20,000 installed, or $10 per watt. A five-kilowatt system that could completely offset the energy needs of most conventional homes may cost about $40,000 installed, or $8 per watt.

Note that these prices are estimates, and your price will depend on system configuration and installation costs.

What kind of savings will my system provide?

Try this formula: A one-kilowatt system could meet about 10% to 20% of a typical residential customer’s needs. Depending on where you live in New Jersey, a one-kilowatt system will produce from 1,500 to 1,600 kilowatt-hours annually. If you multiply this annual power output by your average electricity rate and divide that number by 12, you can calculate your estimated monthly dollar savings. System payback time will vary based on system cost and the cost of electricity over the system’s life. The New Jersey Clean Energy Program offers significant financial incentives to reduce the up-front cost of your system and, thereby, shorten the payback period.

What is Net Metering?

Available through New Jersey’s electric utilities, net metering is an option that actually provides you with a credit for the excess energy produced by your system. For example, if the system generates 300 kilowatt-hours of electricity in a month, and you use only 250 kilowatt-hours, your utility will “store” the surplus until you need it. Your stored kilowatt-hours are “netted,” or paid back, on an annual basis. If your system generates more electricity than you use over the course of a year, your utility will reimburse you for the unused balance.


Meters: With net metering, your electric meter spins forward when electricity flows from the utility into the home and backward when power flows from the home to the utility. Your electric utility will either provide you with one meter (that can register both functions) or two meters (one for each function).

What financial incentives are available?

The New Jersey Clean Energy Program offers substantial incentives to assist you with system purchase and installation. Approved by the New Jersey Board of Public Utilities and administered by New Jersey electric and gas utilities, the Program is designed to encourage residents to enjoy the benefits of renewable energy, including solar electricity. You can receive an incentive that may cover up to 60%* of the total purchase and installation cost of a qualifying system. The incentive is based on system size and will be paid at a rate of $5/watt* for the first 10 kilowatts.**

Additional financial information

New Jersey Sales Tax Exemption: Available to all New Jersey taxpayers, the state offers a full exemption from the 6% state sales tax for all equipment purchases directly associated with a solar electric system.

Standard financing: Your lending institution can supply information on mortgage financing options.

In addition, businesses may qualify for federal tax incentives:

Federal Business Investment Tax Credit: Up to 10% of the purchase and installation cost of a qualifying system can be claimed by a business when filing annual tax returns. (For details, see the IRS Instructions for Form 3468: Investment Credit.)

Federal Modified Accelerated Cost Recovery System (MACRS): Solar electric generating systems installed on commercial facilities are eligible for five-year accelerated depreciation. (For details, see the IRS instructions for Form 4562: Depreciation and Amortization.)

What is the right location for my system?

A well-designed solar electric system needs clear, year-round, unobstructed exposure to the sun’s rays for most or all of the day. Trees, roof gables, chimneys, buildings and other features of a home or landscape may block the modules from the sun and should be avoided. You can make an initial assessment, then we can use a solar path-finder to track the sun’s path and confirm whether a solar electric system is suitable for your home.

System orientation (the compass direction a system faces) affects performance as well. In New Jersey, the sun is always in the southern half of the sky, and is higher in summer than in winter. A south-facing roof is usually best, but those facing east or west can also be good candidates. Flat roofs work well because modules can be mounted flat, facing the sky, or on frames tilted toward the south at an angle. If a rooftop installation is not feasible, solar modules can be mounted on poles or on the ground.

How much space is needed for my system?

Mounting space required for a system is based on its physical size and efficiency level. Most residential systems need from 50 sq. ft. (for a small “starter” system) up to as much as 1,000 sq. ft. of mounting area. A typical one-kilowatt (kW) system would occupy from 80 to 300 sq. ft., depending on the type and efficiency of the modules.

Efficiency and Size: Modules are available in a range of materials and efficiencies. If your location limits the physical size of the system, you may want to install modules that are higher in efficiency and require less surface area to convert sunlight to electricity.

Will the type or condition of my roof affect system installation?

A solar electric system can be installed on any type of roof, although some are simpler and less costly to work with. Typically, composition shingles are easiest to work with, and slate is the most difficult. CESI SOLAR is familiar with all roof types and the installation techniques required to maintain roof integrity.

If your roof will need to be replaced in the near future, you may want to replace it at the same time the solar electric system is installed, so you can avoid a later cost of removing and reinstalling the system. Alternatively, modules that can be integrated into the roof itself are also available. Typical roofing products for this purpose are three-tab shingles, slate, or standing-seam metal roofs. Installation of integrated solar electric modules can even offset the cost of such roofing materials!

the picture below demonstrates typical warranties such as the 25 year one used by the Marine Mammal Stranding Center in Brigantine for roof replacement. At this project the solar panels were disassembled and removed. New roof shingles were applied and the solar system was reinstalled.