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

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

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

Solar incentives mitigate the cost of installing solar panels on your home. Financial incentives like these are in place to encourage more Americans to switch to renewable energy. These incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of New Jersey and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled at the state level. Once your solar panel system meets a certain threshold (usually a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you make is generally considered part of your taxable income.
• Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Carteret utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.
• Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. Rebates might be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Tax Exemptions: Tax exemptions may come in one of 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 ignore the added value of your solar system when calculating property tax for your house.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC offers a tax credit for a predetermined percentage of the cost of your solar system.

The ITC originally covered 30% of the total cost of installing a solar system, and has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total 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 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.

To best understand how the ITC will apply to you, call your local Carteret solar panel installation expert and request more information.

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Under the new program, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible for a 30% tax credit. This credit amount will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. 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. The best way to learn more about how the new Clean Energy Credit will apply to you is to reach out to your local Carteret solar panel installers with your questions.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Carteret

Solar incentives may be offered by the New Jersey government, the federal government or your local utility company. The variety of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. We suggest talking to your local Carteret solar installation company to learn more about these incentives and to be sure that you're getting all of the money you can for your solar system.