2023 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/

Solar incentives mitigate the cost of installing solar panels on your home. Financial incentives like these are intended to encourage more Americans to switch to renewable energy. Various kinds of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be offered by the state of New Jersey, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:

• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce more than a specified (usually small) amount of electricity will qualify for SRECs or similar performance-based incentives. SRECs and the like are typically offered at the state level. SRECs can be sold to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Net Metering: You may be able to sign a net metering contract with your East Orange utility company that will apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your monthly utility bill.
• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Rebates: Rebates, or partial refunds after a purchase, are usually applied prior to any solar tax credits being calculated. Solar rebates might be provided by your local utility company, by your state or by your county.
• Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when you're calculating the amount of property tax you need to pay.

Federal Solar Incentives

Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of your solar system's cost.

The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to claim the credit. Originally, the ITC covered 30% of all costs (panels, labor, accessories and equipment), although this amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Wondering how the ITC applies to your specific situation? Get in touch with your local East Orange solar panel installation expert to get more information.

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. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit might apply to you, get in touch with your local East Orange solar installation company.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more might be available at a more local level. Certain incentives are ongoing, while others might only be available for a limited time. Incentives might be given by the New Jersey government, or by your county or municipality.

Next Steps for Installing Solar in East Orange

Solar energy use nationwide has significantly increased in the last 15 years, in part due to the proliferation of solar incentives. You may get these incentives from the federal government, the New Jersey government or your local utility company. We recommend talking to your local East Orange solar installation expert to learn more about these incentives and to be sure that you're getting the most money possible for your solar system.