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

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

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

The term "solar incentives" refers to financial incentives put in place by solar companies and the government to encourage the use of renewable energy by making solar panels more affordable. Various types of incentives, such as discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be provided via the state of New Jersey, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a threshold (generally small) amount of electricity can qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically given at the state level. You can sell SRECs to your utility company or another buyer, and this is usually considered part of your taxable income.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the federal government. These are different from tax deductions.
• Net Metering: Be sure to talk with your East Orange utility company about signing a net metering agreement. This allows you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
• Rebates: Solar rebates might be provided by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
• Tax Exemptions: Your solar system might qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your home.

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a specified percentage of the money you spend installing solar panels.

The ITC applies to solar systems installed after January 1, 2006, on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost – for panels, equipment, accessories and labor – although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.

Your local East Orange solar panel installer can give you more information about the ITC and how it applies to your situation.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The new Clean Energy Credit now runs until 2035. You 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 credit will then decrease annually until its expiration. The program expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local East Orange solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more may be available at a more local level. Incentives might be provided by your county or municipality, or by the state of New Jersey. Some incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in East Orange

Solar incentives might come from your local utility company, the New Jersey government or the federal government. The variety of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. Getting in touch with your local East Orange solar panel installer is the right first step towards getting the most money possible when you switch to solar energy.