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

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

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

The term "solar incentives" refers to a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different types of incentives, including cash back, discounts or credit towards your monthly utility bill, might 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. Some broad categories of solar incentives include:

• Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement in place with your Edison utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other places you may be refunded a percentage of the value.
• Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions let you ignore the added value of your solar system when calculating how much property tax you need to pay.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
• Rebates: Rebates, or partial refunds after a purchase, are normally given before any solar tax credits are calculated. These rebates may be given by your local utility company, by your state or by your county.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. Typically, you must meet a certain (small) threshold of energy production before your solar system qualifies for SRECs or other performance-based incentives. Incentives like these are normally handled by your state government.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a certain percentage of the money you spend installing solar panels.

The ITC initially applied to 30% of the cost of solar panel installation, although that number has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The 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 panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.

To find out exactly how much money the ITC could save you, contact your local Edison solar panel installer.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. The new Clean Energy Credit extends until 2035. You are now eligible for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This new credit will then be decreased by a few percentage points every year until the date of expiration. 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 better understand how the new Clean Energy Credit might apply to you, speak with your local Edison solar installers.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Edison

The expanding number of solar incentives available has enormously increased the use of solar power nationwide over the last 15 years. You may receive solar incentives from the federal government, the New Jersey government or from your local utility company. If you're ready to switch over to solar energy, getting in touch with your local Edison solar panel installation expert is an excellent place to start.