Commercial Solar ROI & Payback in New Jersey: The 2026 Math

The single question most NJ commercial property owners ask before signing a solar contract: what’s the payback? The answer is more nuanced than a single number — it depends on your tax position, system size, utility rate schedule, and whether paired storage is included. This post walks through the actual math for a representative NJ project.

Sample Project: 250 kW NJ Commercial Rooftop

Consider a 250 kW solar system on a Cherry Hill warehouse. The facility runs on a PSE&G commercial rate schedule with a $0.16 per kWh blended all-in electricity cost, in line with the EIA average for New Jersey commercial accounts in 2026. Annual electricity consumption: 800,000 kWh.

• Gross system cost: $650,000 ($2.60/W installed, typical 2026 NJ commercial pricing)
• Annual production: ~300,000 kWh/year, about 1,200 kWh per kW (37% offset of facility usage)
• Annual energy savings: ~$48,000 (300,000 kWh × $0.16)

Layer 1: Federal Investment Tax Credit (30%)

Under current Inflation Reduction Act law, the federal ITC is 30%. For projects beginning construction after July 4, 2026, the system must be placed in service by December 31, 2027 to qualify. Projects that began construction on or before that date have a longer runway under the continuity rules. Systems under 1 MW AC receive the full 30% rate without having to meet prevailing wage and apprenticeship requirements. The credit is applied directly against federal tax liability, not as a deduction.

• Federal ITC credit: $650,000 × 30% = $195,000

Layer 2: MACRS + Bonus Depreciation

Depreciable basis = gross cost − 50% of ITC = $650,000 − $97,500 = $552,500.

• 100% bonus depreciation, permanent under current federal law: the full $552,500 basis is written off in Year 1 for FEDERAL purposes
• New Jersey has decoupled from federal bonus depreciation, so for NJ Corporation Business Tax the same basis is recovered over the regular 5-year MACRS schedule instead, not all in Year 1
• Tax savings for a C corporation at the 21% federal rate: ~$116,000 in Year 1, plus roughly $39,000 more from the New Jersey deduction spread across the following six years

Layer 3: NJ Successor Solar Incentive (SuSI)

SuSI pays production-based credits for 15 years. Net metered non-residential systems under 1 MW on a rooftop, carport or canopy currently receive $110 per MWh, and public entities receive $130 per MWh. Ground mounted systems and systems above 1 MW are set at lower rates by the NJ Board of Public Utilities.

• Year 1 production: 300 MWh × $110 = $33,000/year
• 15-year total (with 0.5%/yr degradation): approximately $478,000

Layer 4: Net Metering and Property Tax Exemption

Net metering credits excess production at retail rate. Property tax exemption per N.J.S.A. 54:4-3.113 means no incremental assessment for the system.

Payback Math

Year 1 economic benefit:

• Energy savings: $48,000
• Federal ITC: $195,000 (one-time)
• Year 1 depreciation tax benefit: ~$124,000
• Year 1 SuSI credits: $33,000
• Year 1 total: ~$400,000

Cumulative through Year 5: approximately $749,000.

Simple payback: just under 4 years on this example, and 4 to 7 years for typical NJ commercial projects depending on entity type and tax position. On electricity savings alone, measured against the net cost after the federal credit, payback is about 9 years. SuSI figures apply to New Jersey installations; Pennsylvania, Delaware, Maryland and New York have different incentive structures and payback in those states will differ. After payback, the system continues producing energy savings and SuSI credits through year 25, a 20-year stream of positive cash flow.

What Changes the Math

Three things move payback materially:

• Tax position — taxable C-corps capture more value than tax-exempt entities (though IRA Direct Pay opens federal ITC to nonprofits and public schools)
• Demand charges — facilities with high demand charges benefit more from paired battery storage
• Roof age — projects requiring re-roof + solar add upfront cost but lock in current incentive rates

The path to a real number for your facility: a paid feasibility packet that pulls 12 months of utility data, confirms roof and electrical capacity, and models the full incentive stack against your specific tax position.