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

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

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

Solar incentives encourage homeowners to make the switch to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. Solar incentives may include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the New Jersey government and some by your specific utility company, county or municipality. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if your solar system produces more than a specified (generally small) amount of electricity. This category of incentives is normally handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.
• Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your home.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
• Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Bordentown utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in others you may be refunded a percentage of the value.
• Rebates: Solar rebates can be provided by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after you purchase a solar system and before tax credits are calculated.

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. One of the incentives many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a predetermined percentage of the cost of your solar system.

The ITC originally covered 30% of the total cost of solar panel installation, and has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum claim amount. The ITC can be applied 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.

Wondering how the ITC applies to your specific situation? Contact your local Bordentown solar panel installer to get more information.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. You are now eligible for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This credit will then be decreased by a few percentage points every year until the date of expiration. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit might apply to you, talk to your local Bordentown solar installation company.

State & Local Solar Incentives

Rebates, tax credits and more might be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These solar incentives — which may be given by your county or municipality, or by the state of New Jersey — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Bordentown

There are many kinds of solar incentives: those given by local utility companies, those given by the New Jersey government and those given by the federal government, to name a few. The use of solar energy has grown tremendously in the last 15 years, thanks to these incentives. Reaching out to your local Bordentown solar panel installation expert is the best first step towards making sure you get all the incentives you qualify for when you switch to solar energy.