2025 Solar Incentives Guide for Clifton, NJ - Tax Credits & Rebates

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

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

Solar incentives are intended to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. You might be eligible for different types of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of New Jersey and others from the federal government. Types of solar incentives might include:

• Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
• Tax Exemptions: Tax exemptions can come in two forms. The first 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 house.
• Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement in place with your Clifton utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other places you may be refunded a percentage of the value.
• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system can earn SRECs or other performance-based incentives. SRECs and similar incentives are typically handled at the state level.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a specified percentage of the money you spend on solar panels for your home.

The ITC initially applied to 30% of the total cost of installing a solar system, and 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 equipment, accessories and labor. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.

Talking to your local Clifton solar panel installer is the best way to learn more about how the ITC could apply to you.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit now runs until 2035. American homeowners can now apply for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This new credit will then decrease annually until the date of expiration. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Clifton solar panel installation experts can answer your questions and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Not all solar incentives are federal; tax credits, rebates and more might also be offered at the local or state level. These incentives might be provided by the New Jersey government, or by your county or municipality. Some are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Clifton

The nationwide use of solar energy has significantly increased in the last 15 years, in part due to the proliferation of solar incentives. You may get these incentives from the New Jersey government, the federal government or your local utility company. Getting in touch with your local Clifton solar panel installation expert is the right first step towards getting the most money possible when you switch to solar energy.