2023 Solar Incentives Guide for Ashland, NJ - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Ashland?

Source: https://www.dsireusa.org/

The phrase "solar incentives" refers broadly to financial incentives designed to encourage people to use renewable energy by making the installation and use of solar panels more affordable. The incentives might include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the state of New Jersey and some by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when paying property tax on your house.
• Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce more than a specified (generally small) amount of electricity will qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically offered at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates could be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
• Net Metering: Net metering factors in once your solar system is up and running. If you have a net metering agreement with your Ashland utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other places you might receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of your solar system's cost.

The ITC was originally for 30% of the cost of solar system installation, and has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

Have questions about how the ITC applies to your specific situation? Contact your local Ashland solar panel installer to get more information.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now referred to as the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After this, the credit percentage will decrease slightly each year until the program expires in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit will apply to you is to reach out to your local Ashland solar panel installers with your questions.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. As with federal incentives, these may include rebates, tax credits and more. These incentives — which might be handled by the state of New Jersey, or by your county or municipality — may be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Ashland

Solar incentives can come from your local utlity company, the New Jersey government or the federal government. The growing number of available incentives has contributed to a large increase in solar energy use in the last 15 years. We recommend talking to your local Ashland solar installation company for more information about these incentives and to ensure that you're getting all of the money you can for your solar system.