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

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

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

Solar incentives are designed to mitigate the cost of installing solar panels on your home. Financial incentives like these are in place to encourage more homeowners to make the switch to renewable energy. You might be eligible for several kinds of incentives, such as discounts, cash back 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 New Jersey government and others from the federal government. Some broad categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if you have a solar system that produces over a specified (generally small) amount of electricity. These types of incentives are generally handled at the state level. You can sell any SRECs you have to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: Tax exemptions can come in one of two forms. The first 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 calculating property tax for your home.
• Net Metering: You may be able to sign a net metering contract with your Edgewater utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your monthly utility bill.
• Rebates: Rebates, or partial refunds after a purchase, are usually given prior to any solar tax credits being calculated. Solar rebates may be provided by your local utility company, by your county or by your state.

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. 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 set percentage of the cost of your solar system.

The ITC originally covered 30% of the total cost of solar panel installation, and has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum amount you can claim. 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.

To best understand how the ITC could apply to your situation, speak to your local Edgewater solar panel installation expert and request more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). For solar systems installed between January 1, 2022 and December 31, 2032, homeowners may be eligible for a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit ends in 2035. The expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit might apply to you, reach out to your local Edgewater solar installers.

State & Local Solar Incentives

Tax credits, rebates and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Certain incentives are ongoing, while others may only be available for a limited time. Incentives may be offered by your county or municipality, or by the New Jersey government.

Next Steps for Installing Solar in Edgewater

Solar incentives might come from your local utility company, the federal government or the New Jersey government. The growing number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. When you're prepared to make the switch to solar energy, talking to your local Edgewater solar panel installation expert is an excellent place to start.