Updated for 2026.
Paterson has been turning local energy into power for more than two centuries. The city grew up around the Great Falls of the Passaic, where Alexander Hamilton’s manufacturing society harnessed the river to build the first planned industrial city in the country (National Park Service, as of June 2026). In 2026 the move is the rooftop, and New Jersey makes the math unusually strong: PSE&G credits the power your panels send back at the full retail rate, and on top of that the state writes you a separate SREC-II check for 15 years. Paterson is also a dense, renter-majority city, so this page is honest about two paths. If you own a home with a workable roof, you can put up panels and collect both payments. If you rent or your roof will not work, New Jersey’s Community Solar program gets you a guaranteed bill discount with no panels at all. This guide covers what solar panels in Paterson actually cost, how PSE&G net metering and SREC-II pay a rooftop owner, the community solar option if you rent, and how to screen a local installer. Either way the state incentives still apply even though the 30% federal homeowner tax credit (Section 25D) ended after December 31, 2025, and you can check your address in about a minute.
What solar in Paterson is worth in 2026
- New Jersey pays a rooftop owner twice: full-retail net metering plus a separate SREC-II payment for every megawatt-hour you generate (PSE&G; DSIRE Successor Solar Incentive, as of June 2026).
- Your power is expensive, which is what makes solar pay. New Jersey residential electricity averages about 23.49 cents per kWh (EIA, as of March 2026), well above the national average.
- SREC-II pays about $85 per megawatt-hour for 15 years. Each 1,000 kWh your system produces earns one SREC-II at a state-set value of roughly $85, for a fixed 15-year term (NJ BPU Solar factsheet, as of June 2026).
- New Jersey does not tax your solar. The state exempts solar equipment from its 6.625% sales tax and exempts the added home value from property tax (DSIRE New Jersey, as of June 2026).
- Renting in Paterson, or your roof will not work? Community solar is a real option. New Jersey’s permanent Community Solar Energy Program gives subscribers a guaranteed bill discount of at least 20%, or 25% for income-qualified households, with no panels on your own roof (NJDEP Clean Energy, as of June 2026).
- The 30% federal homeowner credit (Section 25D) ended after December 31, 2025 (IRS, as of January 1, 2026), so a Paterson homeowner who buys solar in 2026 cannot claim it.
Is solar worth it in Paterson in 2026?
For most owner-occupied Paterson homes with a workable roof, yes, because New Jersey stacks two payments on top of some of the highest power prices in the country. New Jersey residential electricity averages about 23.49 cents per kWh (EIA, as of March 2026), so every kilowatt-hour your roof makes offsets an expensive one from the grid. On a Paterson home spending $150 or more a month on electricity, the bill savings alone build a strong case, and the SREC-II payments below are extra income on top.
Paterson is a renter-heavy, densely built city, so honesty matters here. Paterson is the third-largest city in New Jersey and the seat of Passaic County, with about 160,000 residents (159,732 in the 2020 Census) packed at roughly 19,000 people per square mile, and only about 27% of homes are owner-occupied, which means close to three-quarters of households rent (U.S. Census QuickFacts, as of the 2020 Census and 2024 estimates). Many city roofs are small, shaded by neighboring buildings, or shared in two-to-four-family homes, so rooftop solar is the right answer for some Paterson households and community solar is the better answer for others. The two paths are covered separately below.
Here is the rooftop bill math, as an illustration only. A New Jersey home that uses about 9,000 kWh a year spends roughly $2,100 a year on electricity at 23.49 cents per kWh. A rooftop system sized to offset most of that cuts the bill by a large share, and your production also earns SREC-II income on top. We do not publish a made-up production number for your ZIP, because real output depends on your roof’s pitch, shading, and direction. Estimate your own with NREL’s free PVWatts calculator, which gives you a real figure for your roof in a couple of minutes.
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From the Great Falls to your roof: why this is a natural fit for Paterson
Paterson is the original American energy town, so rooftop solar is less a new idea here than the next chapter of an old one. In 1792 the new federal government chose the Great Falls of the Passaic River as the site of the country’s first planned industrial city, and Alexander Hamilton’s Society for Establishing Useful Manufactures, chartered the year before, harnessed the falls to power the mills that earned Paterson the name Silk City (National Park Service, as of June 2026). The falls are protected today as Paterson Great Falls National Historical Park, a unit of the National Park System (National Park Service, as of June 2026).
The lesson carries straight into 2026. Paterson’s prosperity was built on capturing a local energy source on site instead of paying to import power, and a rooftop solar system does the same thing for a single household: it generates electricity where it is used, sells the surplus back to PSE&G, and earns the homeowner a separate state payment for producing it. The sections below put real numbers on both of those, plus the community solar option for the many Paterson residents who rent or share a roof.
Your Paterson utility is PSE&G, and it still credits you at full retail
Paterson sits in PSE&G territory, and New Jersey still runs full retail net metering, which is the friendliest version of the rule. When your panels make more than your home uses, PSE&G banks one credit for every excess kilowatt-hour and applies it against later months on a one-to-one basis, valued at the retail rate you would otherwise pay (PSE&G net metering, as of June 2026). That full-retail credit is the part many other states have already cut back, so it is worth knowing New Jersey kept it. For the utility-level detail, see our PSE&G New Jersey net metering and rates guide, and for how the mechanics work statewide, how New Jersey’s net metering and SREC-II work together.
The one wrinkle is the year-end true-up. Each customer has a 12-month contract year that begins when the net meter is installed, and the monthly credits roll forward inside that year. At the anniversary, any credits you used during the year were worth full retail, but any surplus still banked at the true-up is paid out at New Jersey’s Clean Energy Program market price, based on hourly PJM wholesale prices and excluding delivery and system charges, which sits below retail (PSE&G net metering, as of June 2026). The practical move is to size your system close to your annual usage so most of your production offsets retail-rate power rather than rolling into a lower-value year-end payout.
| When your solar credit is used | How PSE&G values it |
|---|---|
| Offsetting your own usage within the 12-month contract year | Full retail rate, one-to-one per kWh |
| Left over as net surplus at the anniversary true-up | NJ Clean Energy Program market price (PJM hourly, excludes delivery and system charges), below retail |
How New Jersey’s SREC-II pays a Paterson rooftop for 15 years
This is the part that sets New Jersey apart: you get paid for the electricity you generate, separate from the bill savings. Under the state’s Successor Solar Incentive (SuSI) program, a net-metered residential system earns one SREC-II for every 1,000 kWh (one megawatt-hour) it produces, and the state sets the residential value at about $85 per SREC-II, paid for a fixed 15-year term (NJ BPU Solar factsheet; DSIRE Successor Solar Incentive, as of June 2026). The value is administratively set and was trimmed from the $90 listed on the original Board factsheet, so treat about $85 as the current figure and confirm what your system locks in, since the state can reset it again.
Stacked on top of net metering, that turns into real money. As an illustration, a roof that produces about 9 megawatt-hours (9,000 kWh) in a year earns roughly 9 SREC-IIs, or about $765 a year, which comes to roughly $11,500 across the full 15-year term, on top of the retail-rate bill savings from net metering. That is an example, not a quote, because your real production depends on your roof; check it with PVWatts and confirm the current SREC-II value before you sign. The two benefits working together are why New Jersey’s payback math is among the strongest in the country.
| How New Jersey pays your rooftop solar | What it does | 2026 value | How long |
|---|---|---|---|
| PSE&G full-retail net metering | Credits the grid power you offset | About 23 cents per kWh (NJ average retail) | Ongoing, while you own the system |
| SREC-II (SuSI program) | Pays you per megawatt-hour you produce | About $85 per SREC-II, one per 1,000 kWh | Fixed 15-year term |
Note: The SREC-II value is set administratively and changes by Board order, so the roughly $85 figure is current as of June 2026, not a guarantee for the future (DSIRE Successor Solar Incentive, as of June 2026). Your installer registers your system in the program and can confirm the value locked in for your 15-year term.
Renting in Paterson, or roof will not work? New Jersey Community Solar
Because most Paterson households rent and many roofs are small or shaded, the more realistic path for a lot of residents is community solar, which needs no panels of your own. New Jersey made its Community Solar Energy Program permanent in 2023, and it lets you subscribe to a share of a local solar project and receive credits on your own electric bill (NJDEP Clean Energy, as of June 2026). Subscribers get a guaranteed minimum bill discount of 20%, or 25% for income-qualified households, and the program reserves a majority of its capacity, 51%, for low-to-moderate-income households (NJDEP Clean Energy, as of June 2026).
The reason this fits Paterson is that you do not need to own your home or your roof to join. A renter can subscribe with an electric account in their own name, in PSE&G territory, without a rooftop install and without landlord approval, subject to a project having room. There is no equipment on your house and you can cancel if you move. For a fuller walk-through of how community solar works in a dense New Jersey city, our Newark solar guide covers it in depth, and our Jersey City solar guide compares notes for another renter-heavy PSE&G city. Community solar trades the SREC-II income and tax exemptions of ownership for a simpler, guaranteed discount, which is exactly the right trade for a household that cannot put panels on its own roof.
| Your situation in Paterson | The path that usually fits | What you get |
|---|---|---|
| You own a home with a workable, unshaded roof | Rooftop solar with PSE&G net metering and SREC-II | Full-retail bill credits plus about $85 per MWh of SREC-II income for 15 years, and the NJ tax exemptions |
| You rent, or your roof is too small, shaded, or shared | New Jersey Community Solar (a subscription, no panels) | A guaranteed bill discount of at least 20% (25% if income-qualified), with no equipment and no up-front cost |
Renting or sharing a roof? See what solar options are available at your Paterson address →
New Jersey solar incentives that still apply in Paterson for 2026
On top of the two rooftop payments, New Jersey skips two taxes that other states charge, and both go to the system owner. That ownership point matters if you lease, because then the leasing company keeps these benefits.
- A 100% sales-tax exemption on solar energy equipment, so you do not pay New Jersey’s 6.625% sales tax on the panels, inverter, and racking (DSIRE New Jersey; N.J.S.A. 54:32B-8.33, as of June 2026).
- A property-tax exemption on the added value a qualifying solar system gives your home, so a Paterson install does not raise your property-tax bill even though it can raise your home’s value (DSIRE New Jersey; N.J.S.A. 54:4-3.113a, as of June 2026).
Because these benefits are statewide, we keep the full detail on our solar costs and incentives across New Jersey guide and our what New Jersey’s solar tax breaks are worth in 2026 explainer rather than repeating all of it here.
The 30% federal solar tax credit (Section 25D) ended after December 31, 2025: what that means for Paterson
You will see this question all over the Paterson search results, so here is the straight answer. The 30% federal Residential Clean Energy Credit (Section 25D) ended for expenditures made after December 31, 2025 under the One Big Beautiful Bill Act, so a Paterson homeowner who buys solar with cash or a loan in 2026 cannot claim that 30% federal credit (IRS Residential Clean Energy Credit; SEIA, as of 2026). Searches like “is the 30% solar tax credit going away in 2026” are common right now; the accurate answer is that the homeowner version already ended after 2025.
One federal credit still exists, but it is not yours to claim. A separate commercial credit, Section 48E, is claimed by the business that owns a leased or PPA system, not by the homeowner (IRS Clean Electricity Investment Credit, as of 2026). On a lease or PPA, the company that owns the panels takes that credit. The 25D homeowner credit, by contrast, ended after December 31, 2025. The good news for Paterson is that the federal change did not touch net metering, SREC-II, the state tax exemptions, or community solar, so New Jersey’s local payback case still holds. MySolarFY does not provide tax advice; confirm your situation with a tax professional.
Paying for solar in Paterson: cash, loan, lease, or PPA
There is no single right way to pay for solar; it comes down to whether you want to own the system and keep the incentives, or skip the up-front cost. If you own the system, with cash or a loan, you keep the SREC-II payments and the New Jersey tax exemptions and you control the system. A lease or PPA can mean no up-front cost for eligible homeowners, but it is a long-term agreement with monthly payments, solar panels are not free, and the company that owns the panels collects the SREC-II income and the New Jersey tax benefits, not you.
| Path | Up-front cost | Who keeps SREC-II and NJ tax benefits | Best when |
|---|---|---|---|
| Cash purchase | Full system cost | You, the owner | You want the fastest payback and the most lifetime value |
| Solar loan | Little to none, financed | You, the owner | You want ownership without paying cash up front |
| Lease or PPA | $0-up-front where eligible | The third-party owner | You prefer no up-front cost and a simpler, fixed monthly bill |
| Community solar subscription | None | Not applicable (you do not own a system) | You rent, or your roof will not work, and you want a guaranteed bill discount |
How to choose a solar installer in Paterson
Paterson search results are crowded with national directories and out-of-area landing pages, so the most useful skill here is screening for a genuinely local, qualified installer. When we pulled the live results for Paterson solar, page one was dominated by national comparison directories and national-brand landing pages, and an out-of-area contractor from Yonkers, New York even ranked on the main Paterson keyword. A high ranking is a marketing result, not a quality signal, so rather than trusting a “best installer” list, screen any company against objective criteria:
- NABCEP certification, the industry’s professional standard for solar installers.
- A valid New Jersey Home Improvement Contractor (HIC) registration and the proper electrical licensing.
- Real experience with PSE&G interconnection, SREC-II registration through SuSI, and Paterson and Passaic County permitting, so your net metering, your incentive payments, and your Permission to Operate all go through cleanly.
- A clear workmanship and equipment warranty in writing.
- A written production estimate and a transparent quote that uses today’s SREC-II value, not an old one.
MySolarFY matches you with licensed installers that serve the Paterson area so you can compare real local quotes side by side, with no obligation.
See which licensed Paterson installers serve your ZIP →
Weighing your options across the area? Compare nearby solar markets with our local guides for Toms River, Edison, Elizabeth, and Clifton.
Frequently asked questions
Is solar worth it in Paterson, New Jersey? For most owner-occupied Paterson homes with a workable roof, yes. New Jersey residential electricity averages about 23.49 cents per kWh (EIA, as of March 2026), well above the national average, so the bill savings are large, and the state layers two payments on top: full-retail net metering through PSE&G and a SREC-II payment of about $85 per megawatt-hour for 15 years (NJ BPU, as of June 2026). Savings are not guaranteed and depend on your roof, usage, and how you pay. If you rent or your roof will not work, community solar is the better fit and still saves you money, so almost every Paterson household has a path.
Can I get solar in Paterson if I rent or live in a two-family house? Often yes, through community solar instead of rooftop panels. New Jersey’s permanent Community Solar Energy Program lets you subscribe to a local solar project and get credits on your own PSE&G bill, with a guaranteed discount of at least 20%, or 25% if your household is income-qualified, and no equipment on your home (NJDEP Clean Energy, as of June 2026). A renter can enroll with an electric account in their own name without landlord approval, subject to a project having room. It is a strong fit for Paterson, where close to three-quarters of households rent (U.S. Census QuickFacts, as of the 2020 Census). Owners of a two-to-four-family home with a sound roof can instead look at rooftop solar and keep the SREC-II income.
How does PSE&G net metering work in Paterson? Paterson is in PSE&G’s New Jersey territory, and New Jersey requires full-retail net metering, so PSE&G credits each excess kilowatt-hour your panels export at the retail rate and banks it to offset later months on a one-to-one basis (PSE&G, as of June 2026). Each customer has a 12-month contract year ending on an anniversary true-up; credits you use within the year are worth full retail, but any surplus left at the true-up is paid at New Jersey’s Clean Energy Program market price, based on PJM wholesale prices and below retail. Sizing your system close to your annual usage keeps most of your production at the higher value.
What is SREC-II and how much does it pay? SREC-II is New Jersey’s solar production payment under the Successor Solar Incentive (SuSI) program. Your system earns one SREC-II for every 1,000 kWh (one megawatt-hour) it produces, and the state sets the residential value at about $85 per SREC-II for a fixed 15-year term (NJ BPU Solar factsheet; DSIRE, as of June 2026). It is separate from your bill savings, so you collect it on top of net metering. The value was reduced from the $90 on the original Board factsheet, so confirm the current figure with your installer, who registers your system in the program. Community solar subscribers do not earn SREC-IIs; that benefit belongs to system owners.
Is the 30% federal solar tax credit gone for 2026? Yes, for homeowners. The 30% federal Residential Clean Energy Credit (Section 25D) ended for expenditures made after December 31, 2025 under the One Big Beautiful Bill Act, so a Paterson homeowner who installs solar in 2026 cannot claim it (IRS; SEIA, as of 2026). You will see search results asking whether the credit is being taken away; the accurate answer is that the homeowner version already ended after 2025. A separate commercial credit, Section 48E, can apply to a leased or PPA system, but the business that owns it claims the credit, not you. New Jersey’s net metering, SREC-II, tax exemptions, and community solar were not affected. MySolarFY does not provide tax advice; confirm your situation with a tax professional.
How much do solar panels cost in Paterson, and can you get solar at no cost? Solar is not free. A typical residential system is a real purchase, and any ad promising panels at no cost is overstating it. What does exist is no-up-front-cost financing for eligible homeowners through a lease or power purchase agreement (PPA), where you pay nothing at installation and make monthly payments instead, while the company that owns the system keeps the SREC-II income and New Jersey tax benefits. Owning the system with cash or a loan is what lets you keep New Jersey’s incentives yourself, and a community solar subscription gives renters a guaranteed bill discount with no system to buy (NJDEP Clean Energy, as of June 2026). The honest way to get your real number is to compare quotes for your address.
Reviewed by the MySolarFY team. Figures were verified against the linked EIA, PSE&G, NJ BPU, DSIRE, NJDEP, U.S. Census, National Park Service, IRS, and SEIA sources as of June 2026; the SREC-II value, net-metering true-up terms, and community solar discount can change, so confirm current terms with PSE&G, the NJ Board of Public Utilities, and your installer before you decide. MySolarFY does not provide tax or financial advice; consult a licensed professional about your own situation. Learn more about the MySolarFY team and how we work.
MySolarFY is a free service that matches homeowners with licensed solar installers. We are not an installer, financing company, tax advisor, or government program, and we do not provide tax advice. The federal residential solar tax credit (Section 25D) ended for expenditures made after December 31, 2025, so homeowners who install solar in 2026 cannot claim it. “No up-front cost” refers to qualifying lease or PPA financing, where eligible homeowners may have no out-of-pocket cost at installation; lease and PPA terms typically run 20 to 25 years, may include an annual price escalator, and total payments may exceed the cost of a cash purchase, and on a lease or PPA the SREC-II income and tax benefits go to the company that owns the system, not the homeowner. Solar panels are not free and monthly payments apply. Incentives, savings, and rates vary, change over time, and are not guaranteed. See our full disclaimer.
