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

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

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

The term "solar incentives" covers a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. These incentives can include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the state of New Jersey and some by your utility company, county or municipality. Types of solar incentives might include:

• Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when calculating property taxes on your home.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system qualifies for SRECs or other performance-based incentives. SRECs and similar incentives are typically handled at the state level.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
• Rebates: Rebates, or cash back after a purchase, are normally given prior to any solar tax credits being calculated. Solar rebates can be offered by your local utility company, by your state or by your county.
• Net Metering: You can sign a net metering agreement with your Branchburg utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your utility bill each month.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of the cost of your solar system.

The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost — for panels, labor, equipment and accessories — although that amount may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.

Your local Branchburg solar panel installation expert can provide more information about the ITC and how it may apply to your situation.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. Homeowners are now eligible for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. The credit will then decrease annually until the date of expiration. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, get in touch with your local Branchburg solar installation company.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Like with federal incentives, these may include tax credits, rebates and more. Some incentives are ongoing, while others are offered for only a limited time. Your local incentives could come from the New Jersey government, or from your specific county or municipality.

Next Steps for Installing Solar in Branchburg

The large number of available solar incentives has helped tremendously increase the adoption of solar energy nationwide over the past 15 years. You may receive solar incentives from your local utility company, the federal government or the New Jersey government. Talking to your local Branchburg solar panel installer is a great first step towards getting all the incentives you qualify for when you switch to solar energy.