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NEW YORK, Feb 10 (Reuters) - Public Service Electric and Gas Co asked New Jersey utility regulators to approve a $773 million proposal to build 120 megawatts of solar power.

In a release, PSE&G, a unit of Public Service Enterprise Group Inc (PEG.N: Quote, Profile, Research), said it expects to recover the investment over 15 to 20 years by raising customer rates.

A typical residential customer would see their monthly bills rise by about 10 cents in the first full year of the program and up to 35 cents per month in 2013.

The cost would be offset by the value of the electricity and Solar Renewable Energy Certificates (SRECs) produced, as well as federal tax credits which would flow back to customers, the company said.

State regulators have 180 days to make a decision, a PSE&G spokeswoman said, noting the utility would be ready to get started on the five-year program as soon as it was approved.

The investment would help New Jersey address an expected shortfall in its current solar energy requirements, while generating hundreds of jobs and stimulating the economy, the company noted.

The state's energy master plan calls for 1,800 MW of solar power by 2020, the utility spokeswoman said. That plan also calls for 20 percent of the state's energy to come from renewable sources by 2020.

One megawatt powers about 800 New Jersey homes.