2023 Solar Incentives Guide for Echelon, NJ - Tax Credits & Rebates

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

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. Various kinds of incentives, including discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be handled by the state of New Jersey, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:

• Rebates: Solar rebates may be provided by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after your purchase of a solar system and before tax credits are calculated.
• Tax Exemptions: These may come in the form of property tax exemptions, which let you exclude the value added by your solar panels when paying property tax on your house. You could also look for exemptions on sales tax at the time of purchase.
• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits are different from tax deductions.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if you have a solar system that produces more than a specified (usually small) amount of electricity. Performance-based incentives are usually handled at the state level. You can sell SRECs to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your Echelon utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in others you may make back a percentage of the value.

Federal Solar Incentives

Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of your solar system's cost.

The ITC is applied to the total cost of solar panel installation, including the panels themselves as well as equipment, labor and accessories. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that 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.

Curious how the ITC might apply to your specific situation? Get in touch with your local Echelon solar panel installer 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. 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. The amount of the credit will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit applies to you is to talk with your local Echelon solar panel company.

State & Local Solar Incentives

Rebates, tax credits and more might be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Certain incentives are ongoing, while others are offered for only a limited time. Your local incentives could come from your county or municipality, or from the New Jersey government.

Next Steps for Installing Solar in Echelon

Nationwide solar energy use has gone up tremendously in the past 15 years, in part thanks to the increase in availability of solar incentives. You might receive these incentives from the federal government, the New Jersey government or your local utility company. Talking to your local Echelon solar panel installer is the best first step towards making sure you get all the incentives you qualify for when you switch to solar energy.