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

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

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

Solar incentives are designed to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Different kinds of incentives, like discounts, cash back or credit towards your monthly utility bill, might be available to you. Certain incentives may be offered by the New Jersey government, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:

• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you've signed a net metering agreement with your Budd Lake utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other areas you might make back a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if the solar system on your home produces over a specified (usually small) amount of electricity. Performance-based incentives are normally handled at the state level. You can sell SRECs to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.
• Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your home.
• Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the federal government. These differ from tax deductions.
• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.

Federal Solar Incentives

Federal solar incentives are probably the first thing that comes to mind when thinking about solar incentives. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of the cost of your solar system.

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

To best understand how the ITC might apply to your situation, contact your local Budd Lake solar panel installation expert and request more information.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners may be eligible for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. Your local Budd Lake solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these may include tax credits, rebates and more. Incentives might be handled by the state of New Jersey, or by your county or municipality. Some incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Budd Lake

There are many types of solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the New Jersey government, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially due to these incentives. Call your local solar panel installation company today to discover more about the various programs and to save as much money as possible on a solar system for your Budd Lake home.