2023 Solar Incentives Guide for Fairfield, NJ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Fairfield.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Fairfield?
Solar Energy Sales Tax Exemption
Successor Solar Incentive (SuSI) Program
Small Net-Metered Non-Residential located on Rooftop, Carport, Canopy and Floating Solar
Projects smaller than 1 MW (dc): $100/SREC-II, $120 for public entities
Projects 1 MW to 5 MW (dc): $90/SREC-II, $110 for public entities
Net Metered Non-Residential Ground Mount
Projects smaller than 1 MW (dc): $85/SREC-II, $105 for public entities
Projects 1 MW to 5 MW (dc): $80/SREC-II, $100 for public entities
Community Solar LMI: $90/SREC-II
Community Solar Non-LMI: $70/SREC-II
Property Tax Exemption for Renewable Energy Systems
Solar Renewable Energy Certificates (SRECs) Registration Program
In June 2016, SREC traded at an average price of $229.90.
PSE&G - Solar Loan Program
NJ Clean Energy- Residential New Construction Program
Single family homes: Ranges from $1,125 to - 24,250
Multi-single homes: Ranges from $1,125 to $18,188
Multifamily homes: Ranges from $625-$12,125
Home Performance with ENERGY STAR Program
Single family : $2,000 to $4,000
Multi-family : $500-$1,500 per unit
Rebates for single family and multi-family should not exceed 50% of the cost of the measures used to calculate total estimated savings (TES)
See table below for details
Single-family: $5,000 (Tier II) or $10,000 (Tier III) 4.99% interest loans up to $15,000 (where utility 0% financing is unavailable)
Ductless Mini Split A/C or Heat Pump: $500
Air Source Heat Pump: $300 (Tier 1), $500(Tier 2)
Geothermal Heat Pump: $500
NJ Clean Energy- WARMAdvantage Program (Electric and Gas)
Solar Hot Water Heater: $1,200
Heat Pump Water Heater: $500
Geothermal Heat Pump: $500
Air-Source or Ductless Mini-Split Heat Pump: $300- $500
Residential Gas Customers (including propane):
Gas Furnace: $250- $500
Gas Boiler: $300
Gas Water Heater: $300
Solar Hot Water Heater: $1,200
Oil Heating Customers:
Oil Furnace: $250
Oil Boiler: $300
Boiler and Water Heater Combination Rebate: $700
Furnace and Water Heater Combination Rebate: $700- $950
New Jersey Renewable Energy Incentive Program (Sustainable Biopower)
Federal Residential Renewable Energy Tax Credit
Solar incentives are meant to encourage homeowners to switch their home over to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. These incentives could include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are provided by the federal government, some by the New Jersey government and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if you have a solar system that produces more than a specified (generally small) amount of electricity. Performance-based incentives are typically handled by the state government. 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: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Rebates: Solar rebates might be provided by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after your purchase of a solar system and before tax credits are calculated.
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement in place with your Fairfield utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.
- Tax Exemptions: Your solar system may qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when you are calculating property taxes on your house.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have heard of. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a certain percentage of the money you spend on solar panels for your home.
The ITC can be applied to solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. This credit can be claimed on solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.
Your local Fairfield solar panel installation expert can provide you with more information about the ITC and how it applies to your situation.
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. The new Clean Energy Credit now runs until 2035. American homeowners 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. The credit will then be decreased by a few percentage points every year until it expires. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. Your local Fairfield solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Like with federal incentives, these may include tax credits, rebates and more. These incentives may be provided by the New Jersey government, or by your county or municipality. Some are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Fairfield
The large number of solar incentives available has enormously increased the use of solar power nationwide over the past 15 years. You may receive solar incentives from your local utility company, the federal government or the New Jersey government. Speak with your local solar panel installation expert today to learn more and to save as much money as possible on a solar system for your Fairfield home.
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EcoWatch's Fairfield, NJ Solar Incentives FAQs
How do I know if I qualify for solar incentives?
It's a smart idea to get in touch with your local Fairfield solar installer for a better understanding of which incentives your project will qualify for. In most cases, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) within a specified date range. Some incentives, such as those provided at the level of the New Jersey government, might have additional requirements.
I already have solar panels. Do I qualify for any incentives?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Reaching out to the company that installed your solar system, or any local Fairfield solar installer, can help you learn what incentives you qualify for.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now titled the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I qualify for incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of solar panels. Depending on which incentives you are claiming, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to ensure that you are claiming incentives correctly and getting the most money you can.
Can I use both solar and another type of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also use both renewable energy sources and a non-renewable backup source of energy. You should discuss the details of your plan with your local Fairfield solar installation expert, so that you understand what you'll need and what incentives you might or might not qualify for.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.