2026 Market Update

Is Buying Solar Still Worth It? Why NJ Homeowners are Swapping Purchases for PPAs

Updated for the 2026 Tax Season | Sunshine Solar Energy

If you are looking into solar for your New Jersey home in 2026, you have likely noticed the math looks different than it did just a year ago. With the expiration of the direct 30% Federal Investment Tax Credit (ITC) for residential ownership, many homeowners are asking the obvious question: Is solar still worth it?

The short answer is yes, but the method has changed. While purchasing a system with cash or a loan is no longer the ROI king it once was, Power Purchase Agreements (PPAs) have emerged as the dominant financial strategy for 2026. This shift allows homeowners to bypass the expired residential credit and still access federal savings indirectly.

Here is why the smartest solar shoppers in the Garden State are pivoting from “owning” to “hosting” their panels this year.

The “Solar Cliff”: What Happened to the Tax Credit?

For years, the primary driver for buying solar panels was Section 25D of the tax code—the “residential energy efficient property credit.” This allowed you to deduct 30% of your system’s solar panel costs directly from your federal income taxes.

Why PPAs Are Winning in 2026

While the residential tax credit is gone, the commercial investment tax credit (Section 48E) is still very much alive. This has created a unique loophole that benefits Third-Party Ownership (TPO) models like leases and PPAs.

• The Solar Company Owns the System: Since they are a business, they can still claim the Section 48E commercial tax credit.
• They Pass the Savings to You: Because the installer gets that 30% discount from the government, they can lower the rate they charge you for electricity.
• You Pay $0 Down: Unlike a cash purchase, a PPA typically requires no upfront capital. You simply pay a fixed monthly rate for the power the panels produce—usually 20-30% lower than PSE&G, JCP&L, or Atlantic City Electric.

The “Hidden” NJ Bonus: SREC-II (SuSI) Program

Even without the federal tax credit, New Jersey remains a top-3 solar market because of the state-level Successor Solar Incentive (SuSI). Under this program, your system generates SREC-II certificates for every megawatt-hour (MWh) of energy produced.

Current values are sitting around $85 per certificate. For an average home, that is roughly $850 to $1,000 annually in direct income, guaranteed for 15 years.

Critical Note: In a PPA, the solar company usually keeps the SRECs to lower your rate further. However, some premium PPA structures in NJ now allow homeowners to share in this revenue.

The Numbers: Cash Purchase vs. PPA (2026 Estimates)

To visualize the difference, let’s look at a standard 10kW system installation in New Jersey right now.

The Verdict: Which Path is Right for You?

The era of “buying is always better” ended when the ball dropped on New Year’s Eve 2025.

• Choose a PPA if: You want immediate bill reduction without debt, you want to avoid maintenance responsibilities, or you do not have the tax liability to use any remaining commercial credits.
• Choose Cash if: You have significant capital to deploy, you plan to stay in your home for 20+ years, and you want to keep 100% of the SREC-II income for yourself.