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

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

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

The term "solar incentives" refers to a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different kinds of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be offered by the state of New Jersey, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:

• Net Metering: You can sign a net metering contract with your Elizabeth utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your utility bill each month.
• 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. Generally, you must meet a certain (small) threshold of energy production before your solar system can earn SRECs or other performance-based incentives. Incentives like these are generally handled by your state government.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from the total price before any tax credits are calculated.
• 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 may come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when paying property tax on your home.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some knowledge of. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a specified percentage of the money you spend installing solar panels.

The ITC was originally for 30% of the total cost of installing a solar system, although it has fluctuated slightly over the last few 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 accessories, equipment 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 more fully understand how the ITC may apply to your situation, call your local Elizabeth solar panel installer and request more information.

The ITC was renewed and increased in scope after 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 may be eligible for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit might apply to you is to talk with your local Elizabeth solar panel installation expert.

State & Local Solar Incentives

Rebates, tax credits and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. These incentives — which might be given by your county or municipality, or by the state of New Jersey — might be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Elizabeth

You can apply for solar incentives from the federal government and the New Jersey government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. It is a good idea to talk to your local Elizabeth solar installer for more information about these incentives and to be sure that you're getting the most money possible for your solar panels.