2023 Solar Incentives Guide for Chatham, NJ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Chatham.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Chatham?
Solar Energy Sales Tax Exemption
Successor Solar Incentive (SuSI) Program
Small Net-Metered Non-Residential located on Rooftop, Carport, Canopy and Floating Solar
Projects smaller than 1 MW (dc): $100/SREC-II, $120 for public entities
Projects 1 MW to 5 MW (dc): $90/SREC-II, $110 for public entities
Net Metered Non-Residential Ground Mount
Projects smaller than 1 MW (dc): $85/SREC-II, $105 for public entities
Projects 1 MW to 5 MW (dc): $80/SREC-II, $100 for public entities
Community Solar LMI: $90/SREC-II
Community Solar Non-LMI: $70/SREC-II
Property Tax Exemption for Renewable Energy Systems
Solar Renewable Energy Certificates (SRECs) Registration Program
In June 2016, SREC traded at an average price of $229.90.
NJ Clean Energy- Residential New Construction Program
Single family homes: Ranges from $1,125 to - 24,250
Multi-single homes: Ranges from $1,125 to $18,188
Multifamily homes: Ranges from $625-$12,125
Home Performance with ENERGY STAR Program
Single family : $2,000 to $4,000
Multi-family : $500-$1,500 per unit
Rebates for single family and multi-family should not exceed 50% of the cost of the measures used to calculate total estimated savings (TES)
See table below for details
Loans
Single-family: $5,000 (Tier II) or $10,000 (Tier III) 4.99% interest loans up to $15,000 (where utility 0% financing is unavailable)
COOLAdvantage Program
Ductless Mini Split A/C or Heat Pump: $500
Air Source Heat Pump: $300 (Tier 1), $500(Tier 2)
Geothermal Heat Pump: $500
NJ Clean Energy- WARMAdvantage Program (Electric and Gas)
Solar Hot Water Heater: $1,200
Heat Pump Water Heater: $500
Geothermal Heat Pump: $500
Air-Source or Ductless Mini-Split Heat Pump: $300- $500
Residential Gas Customers (including propane):
Gas Furnace: $250- $500
Gas Boiler: $300
Gas Water Heater: $300
Solar Hot Water Heater: $1,200
Oil Heating Customers:
Oil Furnace: $250
Oil Boiler: $300
Combination Rebate
Boiler and Water Heater Combination Rebate: $700
Furnace and Water Heater Combination Rebate: $700- $950
New Jersey Renewable Energy Incentive Program (Sustainable Biopower)
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" covers a wide 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. Various types of incentives, like cash back, discounts or credit towards your monthly utility bill, may be available to you. Some incentives may be handled by the New Jersey government, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:
- Rebates: Rebates, or partial refunds after a purchase, are typically applied before any solar tax credits are calculated. Rebates can be given by your local utility company, by your county or by your state.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (usually small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and performance-based incentives in general are typically provided by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
- 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 exclude the added value of your solar system when paying property tax on your house.
- Net Metering: Don't forget to talk to your Chatham utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
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Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a specified percentage of your solar system's cost.
The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as labor, equipment and accessories. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
Your local Chatham solar panel installation expert can give you more information about the ITC and how it applies to your situation.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit lasts until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; the amount will decrease slightly on a yearly basis until the end of the current program. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit might apply to you, talk to your local Chatham solar installation company.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Similar to federal incentives, these could include tax credits, rebates and more. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives might come from your county or municipality, or from the New Jersey government.
Next Steps for Installing Solar in Chatham
The variety of available solar incentives has contributed greatly to the increase in the use of solar power nationwide over the last 15 years. You might qualify for solar incentives from your local utility company, the federal government or the New Jersey government. We suggest talking to your local Chatham solar installation company for more information about these incentives and to be sure that you're getting the largest number possible for your solar system.
EcoWatch's Chatham, NJ Solar Incentives FAQs
How much will a solar system save me annually on my electric bill in Chatham?
Generally, Chatham homeowners who install solar panels save about $889.49 per year, or about $16,900.31 over 20 years after making the switch.
Who installs solar panel systems near me?
To discover the best solar panel installers near you, read our article on the top solar companies in Chatham.
What are some environmental benefits of adding solar panels to my home?
You can reduce your carbon footprint by 250 pounds of CO2 annually by switching to solar panels. This adds up to roughly 5,000 pounds over 20 years. Solar is also a renewable energy source, meaning that making the switch reduces the drain on our planet's resources.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly named the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I trade in my appliances for ones that can utilize solar energy, are there benefits that I can claim?
The new Inflation Reduction Act includes provisions for a number of incentives designed to reward homeowners who make eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.