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

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. Various types of incentives, including discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be provided via the state of New Jersey, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are generally handled by your state government. Once your solar panel system meets the threshold (normally a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you make 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.
• Net Metering: You may be able to sign a net metering contract with your Florham Park 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.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions allow you to ignore the added value of your solar system when you're calculating how much property tax you need to pay on your home.

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. One of the incentives that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a certain percentage of your solar system's cost.

The ITC initially applied to 30% of the cost of installing solar panels, although it has fluctuated slightly over the years 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 systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

Contacting your local Florham Park solar panel installation expert is the best way to understand how the ITC may apply to you.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. The amount will decrease slightly on a yearly basis until the end of the current program. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Florham Park solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

Tax credits, rebates and more might be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives might come from your county or municipality, or from the New Jersey government.

Next Steps for Installing Solar in Florham Park

You can apply for and receive solar incentives from the New Jersey government and the federal government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. If you're ready to make the switch to solar energy, talking to your local Florham Park solar panel installation expert is an excellent place to start.