Why New Jersey Electricity Bills Keep Rising — And How Solar Locks In Your Rate for Good

If your electricity bill has felt uncomfortably higher lately, you're not imagining it — and you're not alone.

New Jersey homeowners served by PSE&G, JCP&L, Atlantic City Electric, and Rockland Electric have collectively absorbed some of the steepest electricity rate increases in the country over the past two years. The situation became so severe that on January 20, 2026 — her first day in office — Governor Mikie Sherrill signed two executive orders declaring a State of Emergency on Utility Costs in New Jersey.

That's not a metaphor. The governor of New Jersey declared a formal energy emergency. And the primary culprit, increasingly, is data centers.

Here's what's happening, what the government response actually means for your bill, and what New Jersey homeowners can do right now to permanently protect themselves.

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The Numbers Are Staggering

Let's start with what's already hit your bill.

On June 1, 2025, the New Jersey Board of Public Utilities confirmed rate increases ranging from 17% to over 20%, depending on your utility provider:

• PSE&G customers: up approximately 17.24%, with average monthly bills rising from $155.84 to $182.71
• JCP&L customers: up 20.2%, with bills climbing from $112.25 to $134.92
• Atlantic City Electric customers: up 17.23%, with bills rising from $162.60 to $190.62
• RECO customers: up 18.18%

As of March 2026, the average New Jersey household electricity bill is $259 per month — and the state's electricity rate sits at 20 cents per kilowatt-hour. From 2020 to 2025, New Jersey electricity bills had already risen by 55% — the sixth-highest increase in the country.

The result: New Jersey's household energy costs are now roughly 20% higher than the national average. And the data is clear about what's driving it.

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The Data Center Problem Nobody Warned You About

New Jersey is home to approximately 100 data centers — the massive facilities that power cloud storage, streaming services, and increasingly, artificial intelligence. That number is growing rapidly, and so is their appetite for electricity.

New Jersey sits within the PJM Interconnection, the nation's largest regional power grid, which manages electricity distribution across 13 states and Washington D.C., serving 67 million people. PJM runs annual capacity auctions to determine how much utilities must pay to secure electricity — and those costs are passed directly to you.

Here's where data centers come in. At the 2022 capacity auction, the price was set at $28.92 per megawatt-day. By the July 2024 auction, it had exploded to $269.92 per megawatt-day — an over 800% increase in two years. The total cost to supply the grid jumped from $2.2 billion to $14.7 billion in a single auction cycle.

According to PJM's own analysis, data centers account for 70% of the projected increase in electricity demand going forward. As one energy economist put it: proposed data centers can be "the size of a large power plant, if not bigger," and when those forecasts are included in PJM's demand model, prices rise accordingly.

Supply has not kept pace. As of early 2025, 143 gigawatts worth of new energy projects — including 79 projects in New Jersey — were stuck waiting in PJM's interconnection queue, enough to power approximately 115 million homes. PJM had paused reviewing new project applications entirely for years, creating a bottleneck that prevented new solar and wind capacity from coming online to balance demand.

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What the Governor's Emergency Order Actually Means for Your Bill

Governor Sherrill's executive orders, signed on January 20, 2026, were a meaningful response to a genuine crisis. Understanding exactly what they do — and don't do — is important.

Executive Order No. 1 directs the Board of Public Utilities to provide Residential Universal Bill Credits (RUBCs) to offset electricity supply cost increases taking effect in June 2026, freezes further utility rate hike approvals in the near term, and orders the BPU to review utility business models with an eye toward cost reduction.

Executive Order No. 2 declares a formal emergency under the Disaster Control Act and accelerates programs to bring thousands of megawatts of new solar and battery storage generation online in New Jersey. It also specifically directs the BPU to crack down on data center "ghost loads" — requiring utilities to report on energy requests from data centers — and establishes a Nuclear Power Task Force.

The results of New Jersey's February 2026 Basic Generation Service (BGS) auction brought some relative relief: supply rates for June 2026 are expected to be largely stable compared to last year's painful spike, with the following projected impacts before credits are applied:

• Atlantic City Electric: up just $0.22/month (0.11%)
• JCP&L: up $2.23/month (1.6%)
• PSE&G: actually down $3.23/month (−1.8%)
• RECO: down $1.17/month

This is genuinely good news compared to 2025's double-digit increases. But the Division of Rate Counsel director Brian Lipman has been direct about the limits of these protections: the bill credits should keep your bill flat if supply prices don't spike unexpectedly. If they do, the BPU may not have sufficient funding to cover the gap.

More importantly, critics of the executive order approach have pointed out a structural concern: freezing rate increases in 2026 may simply defer them to 2027, potentially with interest, as utilities seek to recover deferred revenue. As one utility regulatory expert noted, the worry is that New Jersey ratepayers could face a bigger increase in 2027 to compensate for what wasn't collected this year.

The July 2025 PJM capacity auction — which sets prices for the June 2026–May 2027 delivery year — hit the newly imposed price cap at $329.17 per megawatt-day, indicating continued upward pressure on rates. The cap prevented an even higher price, but the underlying demand dynamics remain unresolved.

In short: the government is providing short-term relief. It is not providing a permanent solution.

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Why This Pressure Isn't Going Away

The structural forces driving New Jersey's electricity crisis are not resolved by bill credits or rate freezes. They require either dramatically more power supply on the grid or significantly less demand — and neither is happening quickly.

PJM projects that data center demand alone could require more than 50 gigawatts of additional peak electricity capacity by 2030. The bipartisan coalition of nine governors — including New Jersey, Pennsylvania, Maryland, Virginia, Delaware, and others — has called on PJM's board to improve transparency and restore confidence for ratepayers. Pennsylvania sued PJM to cap prices and won, saving customers an estimated $21 billion over several years. Legislative efforts are advancing in New Jersey and six other states to require PJM to operate with greater accountability.

These are meaningful developments. They are also slow-moving ones. The interconnection queue backlog alone means that new renewable capacity approved today may not reach New Jersey homes until 2027 or later.

For New Jersey homeowners, waiting for Trenton, FERC, or PJM to fully solve this is not a plan.

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What Solar Actually Solves Here

There's a reason solar installations in New Jersey have accelerated sharply alongside rising utility rates — and why Governor Sherrill's second executive order specifically prioritized expanding rooftop solar as an emergency measure. For homeowners, it is the most direct available solution.

When you install a solar system on your home, you are no longer primarily dependent on a utility grid whose costs are set by PJM auctions driven by the electricity demands of AI data centers. You generate your own power. In New Jersey, where sun exposure is strong enough to make solar an excellent investment even in winter months, a properly sized system can eliminate most or all of your monthly electricity costs.

Here's what that means in real terms:

You lock in your energy rate. Your solar system produces electricity at a fixed effective cost determined by your installation — not by whatever PJM decides at its next annual auction. When rates rise again next June, your solar-generated power doesn't follow.

The compounding savings are substantial. At New Jersey's current average of $259 per month in electricity costs, a homeowner who goes solar in 2026 could avoid spending more than $86,500 on electricity bills over a 25-year system lifespan — and that estimate assumes only a 2% annual rate increase, which has proven conservative given recent history.

You protect yourself from the deferred hike risk. If analysts are right that 2027 could bring a larger-than-usual increase to compensate for 2026's freeze, solar owners will be largely insulated from that impact before it arrives.

You may qualify for significant incentives right now. New Jersey's solar incentive programs, combined with the federal solar investment tax credit, make 2026 a strong window to go solar. Governor Sherrill's emergency order specifically accelerated solar programs, which means additional support for rooftop installations may be available. Those incentives are not guaranteed to remain at their current levels indefinitely.

You may be able to include a new roof at no money out of pocket. Solar 4 Heroes regularly helps homeowners bundle a roof replacement with their solar installation, financing both together so that the system's savings offset the combined cost over time.

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The Solar 4 Heroes Approach for New Jersey Homeowners

At Solar 4 Heroes, we specialize in helping New Jersey homeowners navigate the solar process from start to finish — without the runaround. We partner with multiple installation and financing providers, which means we shop the market on your behalf and find the combination that delivers the best price and the best fit for your home. You get one dedicated energy specialist who guides your project from the initial estimate all the way to the day your system turns on.

We serve homeowners across South Jersey, Central Jersey, and beyond — including communities in Camden County, Gloucester County, Burlington County, Mercer County, Monmouth County, Ocean County, and throughout the greater Philadelphia suburbs on the New Jersey side. We also serve homeowners across Connecticut, Delaware, Florida, Massachusetts, Maryland, New Hampshire, New York, Pennsylvania, Rhode Island, and Virginia.

For most homeowners, the installation process takes 30 to 60 days from permit submission to activation. Once your system is live, we monitor it free of charge for 25 years.

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The Bottom Line for New Jersey Homeowners

The electricity crisis New Jersey residents have been living through is real, well-documented, and politically undeniable — the governor declared a formal emergency about it on day one of her administration. The short-term relief provided by executive orders and bill credits is meaningful. But experts, regulators, and the governor herself have acknowledged that it does not permanently fix the structural problem.

Data centers are consuming electricity at a scale the grid was never designed to absorb. PJM's interconnection queue is backlogged with years of projects. The next auction has already priced in continued pressure. And utilities may seek to recover deferred revenue in 2027 regardless of what happens this year.

Going solar is the most direct, durable thing a New Jersey homeowner can do to step off that treadmill. It converts your energy costs from a variable, utility-controlled expense into a fixed, predictable investment — one that pays you back over decades, regardless of what PJM decides at its next auction.

If you've been on the fence about solar, the data center boom, the emergency executive orders, and the continued upward pressure on New Jersey electricity rates have changed the calculus. The cost of waiting is no longer zero.

Get a free estimate from Solar 4 Heroes →

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Solar 4 Heroes serves homeowners across CT, DE, FL, MA, MD, NH, NJ, NY, PA, RI, and VA. Call us at (856) 308-5144 or reach out at cj@solar4heroes.com.