2023 Solar Incentives Guide for Closter, NJ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Closter.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Closter?
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
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)
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
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
The term "solar incentives" refers to financial incentives that are in place to encourage people to use renewable energy by making installing and using solar panels more affordable. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are provided by the state of New Jersey or your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Rebates: Solar rebates might be offered by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
- 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, which allows you to exclude the added value of your solar system when paying property tax on your house.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you have in place a net metering agreement with your Closter utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other places you may make back a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. Typically, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or other performance-based incentives. SRECs and similar incentives are generally handled by your state government.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specified percentage of the cost of your solar system.
The ITC applies towards solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can receive this credit for solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
Your local Closter solar panel installation expert can give you more information about the ITC and how it might apply to your situation.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now referred to as the Clean Energy Credit. With the new provisions, solar installation projects started after January 1, 2022 and completed by the end of 2032 might qualify for a 30% tax credit. This percentage will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit will apply to you, speak with your local Closter solar installation expert.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more might be available at a more local level. These incentives may 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 Closter
Solar incentives might come from your local utlity company, the New Jersey government or the federal government. The large number of incentives available has contributed to a large increase in solar energy use in the last 15 years. Talking to your local Closter solar panel installation expert is an excellent first step towards getting the most money possible when you switch to solar energy.
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EcoWatch's Closter, NJ Solar Incentives FAQs
My home already has solar panels installed. Are there any incentives that I qualify for?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Speaking with the company that installed your system, or any local Closter solar installer, can help you learn what incentives you qualify for.
Who installs solar panel systems near me?
To learn about the top solar panel installation companies near you, read our article on Closter's top solar panel companies.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly named the federal solar tax credit, or ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
I want to change out my appliances for ones that are more energy-efficient. Are there any incentives I can claim?
The new Inflation Reduction Act introduces a number of incentives meant to reward homeowners for making eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home — for example, a combination of wind and solar. You can also use both renewable energy sources and a backup source of non-renewable energy. Be sure to discuss your proposed plan with your local Closter solar panel installer, to make sure you know what you'll need and what kinds of incentives you might or might not qualify for.
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.