New Jersey bills spiked as PJM capacity costs jumped from $2.2B to $14.7B. Why the state is so exposed and why solar and storage are the fastest relief.
In the summer of 2025, many New Jersey households opened electric bills that were several times higher than the month before. NJ.com's editorial board described one reporter's JCP&L bill jumping from $66 to $340, with the same house and the same usage.
The main driver was PJM Interconnection, the regional grid operator. The cost of its capacity auction rose from $2.2 billion to $14.7 billion, and utilities passed those costs on to customers.
Here is why New Jersey bills spiked, how the state got so exposed, and why solar and storage are the fastest tools for relief.
Why Did New Jersey Electric Bills Spike in 2025?
New Jersey bills spiked mainly because PJM's capacity auction costs jumped from about $2.2 billion to $14.7 billion, and those costs flowed through to customers starting in June 2025.
Capacity costs pay power plants and other resources to be available during peak demand. When PJM's auction clears at a high price, every customer in the affected region pays more.
NJ.com described bills rising by more than 400% for some households. The Sierra Club reported increases of around 20% in the state overall.
The pressure hasn't eased. PJM's next auction cleared at the maximum allowed price, and demand from AI data centers keeps growing.
How Did New Jersey Become So Exposed?
New Jersey has lost major in-state power sources over the past decade and now relies heavily on power from elsewhere in the PJM region.
The key changes:
- ●Nuclear. The Oyster Creek nuclear plant closed in 2018.
- ●Coal. New Jersey's last coal plants retired in the early 2020s.
- ●Offshore wind. Ørsted canceled its Ocean Wind 1 and 2 projects in October 2023, citing high interest rates, inflation, and supply chain problems.
- ●Federal pullback. The Trump administration paused offshore wind leasing on its first day in office and later halted construction of Revolution Wind off Rhode Island, before a judge allowed work to resume.
Losing in-state generation left New Jersey more dependent on imports and more exposed to PJM's regional prices.
That dependence has a cost. When a state relies on power from elsewhere in the region, its customers pay capacity prices set by conditions far outside its borders, from plant retirements in other states to data center growth in Virginia and Ohio.
Who's to Blame for High Bills?
Critics point in different directions: some blame Governor Phil Murphy's reliance on offshore wind, others blame federal policy that stalled clean energy. In practice, several forces combined.
PJM's market design, slow interconnection of new projects, rising demand, and plant retirements all played a role. We covered the regional push for fixes in nine governors' demand for PJM reforms.
Finger-pointing doesn't lower bills. Adding supply does.
Residents don't have four to ten years to wait. Their bills are rising now.
Why Are Solar and Batteries the Fastest Relief?
Solar and battery storage can be built in months to a couple of years, while new fossil or nuclear plants can take a decade or more. That speed matters when bills are rising now.
The advantages of solar and storage for New Jersey:
- ●Speed. Projects can be permitted and built far faster than large power plants.
- ●In-state supply. Rooftop, community, and commercial solar produce power inside New Jersey.
- ●Peak relief. Batteries shift solar into evening hours when prices are highest.
- ●Public support. Solar is popular with a majority of New Jersey residents, according to NJ.com.
The state is moving on several fronts. It approved a 3 GW community solar expansion and passed a law to speed up solar permitting.
What Did New Jersey's Governor Race Mean for Energy?
Energy costs became a central issue in New Jersey's 2025 governor's race. Republican Jack Ciattarelli said he would ban offshore wind and expand natural gas. Democrat Mikie Sherrill pledged more investment in solar and nuclear.
Sherrill won in November 2025. She had promised to freeze utility rates and expand clean energy, as we covered in the push for a rate freeze and clean energy.
The larger question isn't which single source wins. New Jersey needs reliability and affordability, and no one resource will deliver both on its own.
What Short-Term Relief Has New Jersey Offered?
New Jersey approved $100 bill credits for about 3.9 million households and signed laws requiring a review of PJM's pricing model and disclosure of utility votes inside PJM.
We covered those measures in New Jersey's $100 energy credit and PJM laws. They help, but they don't change the underlying cost trajectory.
What Does This Mean for Solar Owners in New Jersey?
High and rising bills make every kilowatt-hour from a working solar system in New Jersey more valuable.
New Jersey has one of the oldest solar markets in the country, and many commercial systems were installed in the 2010s. Some are now losing output to aging inverters or degraded panels.
Repowering an aging PV system can restore that output using the grid connection already in place. In a state short on in-state supply, that matters.
Start With a Ballpark Estimate
New Jersey bills are unlikely to fall soon. Find out what your existing solar project may be worth before deciding whether to repair, repower, or sell.
Sources: NJ.com, "Power politics: Clean energy remains N.J.'s best shot at lower electric bills"; Utility Dive, "PJM capacity prices set another record with 22% jump"; Sierra Club, governors' PJM letter; CT Mirror, Revolution Wind ruling
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