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

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Different kinds of incentives, including cash back, discounts or monthly utility bill credits, may be available to you. Some incentives may be provided via the New Jersey government, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:

• Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when paying property tax on your house.
• Rebates: A rebate is a partial refund given after you've purchased your solar system. Rebates may be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives might be available to you if you have a solar system that produces over a specified (usually small) amount of electricity. This category of incentives is usually handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you make is generally considered part of your taxable income.
• Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the federal government. These are different from tax deductions.
• Net Metering: You may be able to sign a net metering agreement with your Byram utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your utility bill each month.

Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. An incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of the cost of your solar system.

The ITC covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can be claimed on a solar panel system installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.

Contacting your local Byram solar panel installation expert is the best way to learn more about how the ITC may apply to you.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit; this amount will decrease slightly each year until the current program ends. Beginning in 2023, it will also be easier to get credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit applies to you is to speak with your local Byram solar panel installation expert directly.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these could include tax credits, rebates and more. These incentives may be distributed by your county or municipality, or by the New Jersey government. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Byram

There are many types of solar incentives: those offered by the federal government, those offered by the New Jersey government and those offered by local utility companies, to name a few. The use of solar energy has increased enormously in the last 15 years, thanks to these incentives. It is a good idea to talk to your local Byram solar installation company for more information about these incentives and to be sure that you're getting all of the money you can for your solar system.