Net Metering (New Jersey)

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Last modified on February 12, 2015.

Rules Regulations Policies Program

Place New Jersey

Name Net Metering
Incentive Type Net Metering
Applicable Sector Agricultural, Commercial, Fed. Government, Industrial, Institutional, Local Government, Nonprofit, Residential, Schools, State Government, Tribal Government
Eligible Technologies Anaerobic Digestion, Biomass, Fuel Cells using Renewable Fuels, Geothermal Electric, Landfill Gas, Photovoltaics, Solar Thermal Electric, Tidal Energy, Wave Energy, Wind
Active Incentive Yes

Implementing Sector State/Territory
Energy Category Renewable Energy Incentive Programs
Aggregate Capacity Limit No limit specified (BPU may limit to 2.5% of peak demand)
Applicable Utilities Investor-owned utilities (electric distribution companies), electric suppliers

Net Excess Generation Generally credited to customer's next bill at retail rate; excess reconciled annually at avoided-cost rate

REC Ownership Customer owns RECs

System Capacity Limit No capacity limit specified, but system must be sized so that energy production does not exceed customer's annual on-site energy consumption

Date added to DSIRE 2000-01-01
Last DSIRE Review 2013-06-24
Last Substantive Modification
to Summary by DSIRE

References DSIRE[1]


New Jersey's net-metering rules apply to all residential, commercial and industrial customers of the state's investor-owned utilities and energy suppliers (and certain competitive municipal utilities and electric cooperatives). Systems that generate electricity using solar, wind, geothermal, wave, tidal, landfill gas or sustainable biomass resources, including fuel cells (all "Class I" technologies under the state RPS), are eligible. In January 2010 A.B. 3520 removed the individual system size cap of 2 MW formerly contained on the Board of Public Utilities (BPU) rules, and the necessary rule changes were made effective in July 2010. However, while no specific system size cap exists, system size remains limited to that needed to meet annual on-site electric demand. There is no firm aggregate limit on net metering, although the BPU is permitted to allow utilities to cease offering net metering if statewide enrolled capacity exceeds 2.5% of peak electric demand.

A single metering arrangement is preferred. According to the statute, customer-generators have several compensation options for net excess generation (NEG), as listed below. The latter two options were added by S.B. 2936 in January 2008.
  • Customer-generator receives month-to-month credit for NEG at the full retail rate and is compensated for remaining NEG at the avoided-cost of wholesale power at the end of an annualized period.
  • Customer-generator is compensated for all NEG on a real-time basis according to the PJM power pool real-time locational marginal pricing rate, adjusted for losses by the respective zone in the PJM.
  • Customer generator may enter into a bilateral agreement with their electric supplier or service provider for the sale and purchase of NEG. Real-time crediting is permitted, subject to the applicable PJM rules.

In addition to the real-time crediting options described above, S.B. 2936 also: (1) expanded the list of eligible customers to include industrial and large commercial customers; (2) extended net metering to all systems that generate electricity using "Class I" renewable-energy resources; and (3) allowed utilities to recover the costs of "any new net meters, upgraded net meters, system reinforcements or upgrades, and interconnection costs" either through their regulated rates or from net-metered customers.

A separate rule making proceeding completed in March 2009 allows customer-generators to select any month of the year to begin their annualized period. This rule applies to all net metering customers, regardless of whether they began net metering prior to March 2, 2009 when the rule took effect. The choice of an annualized period is generally permanent unless the utility voluntarily accepts the customer's choice of a new annualized period.

Customers eligible for net metering retain ownership of all renewable-energy credits (RECs) associated with the electricity they generate. Utilities are required to report net metering enrollment reports to the BPU twice annually, one covering January - June and other covering July - December. The reports must contain information detailing estimated customer generation supplied to the distribution grid, estimated grid electricity supplied to net metered customers, the number of customer that received payments for annual NEG, and the total dollar amount paid to net metering customers for annual NEG by month. In July 2012, New Jersey enacted legislation (S.B. 1925) requiring electric utilities to allow public entities such as state and local governments, local agencies and school districts to engage in "net metering aggregation" of solar facilities. However, the rules implemented do not meet the defintiion of aggregate net metering as typically defined. In order to qualify for net metering aggregation, the solar facility must be on property owned by the customer, be owned and operated by the single customer, and with the exception of state entities, be located within the customer's territorial jurisdiction. For state entity projects, all facilities must be located within 5 miles of one another. In addition, for all customers all facilities must be located within the territory of the same electric utility, be served by the same basic generation service provider or electric power supplier, and all facilities must be within the same customer class of the applicable electric utility tariff. The customer-generator (or host meter) receives credit for excess generation at the retail rate; meters other than the host customer are credited at the wholesale rate at the end of a designated annualized period.

For further information, please contact the New Jersey Office of Clean Energy or consult the program website for the appropriate contact person at your utility.

Incentive Contact

Contact Name Public Information - Net Metering and Interconnection
Department New Jersey Board of Public Utilities
Division Office of Clean Energy
Address 2 Gateway Center

Place Newark, New Jersey
Zip/Postal Code 07102
Phone (866) 657-6278


Authorities (Please contact the if there are any file problems.)

Authority 1: N.J. Stat. § 48:3-87
Date Effective 1999
Date Enacted 1999 (subsequently amended)

Authority 2: N.J.A.C. § 14:8-4.1 et seq.
Date Effective 2004-10-04
Date Enacted 09/13/2004 (subsequently amended)

Authority 3: S.B. 1925
Date Effective 2012-07-23
Date Enacted 2012-07-23

  • Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.[1]


  1. 1.0 1.1  "Database of State Incentives for Renewables and Efficiency (DSIRE)"