2023 Solar Incentives Guide for Franklin, NJ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Franklin.
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 March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Franklin?
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
The phrase "solar incentives" generally refers to financial incentives designed to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. You might be eligible for various types of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the New Jersey government and others from the federal government. Some solar incentives you might qualify for are:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are generally handled by your state government. Once your solar system meets a certain threshold (typically a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you receive from the sale is usually considered part of your taxable income.
- Net Metering: Net metering factors in once your solar system is up and running. If you have in place a net metering agreement with your Franklin utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, 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 could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when you are calculating property taxes on your home.
- Rebates: A rebate is a partial refund given after you've purchased your solar system. Rebates could be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a specified percentage of the money you spend on your solar system.
The ITC was originally for 30% of the total cost of installing a solar system, 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 installation cost 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 owned by you and in the United States.
Talking to your local Franklin solar panel installation expert is the best way to understand how the ITC may apply to you.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. After 2032, the credit percentage will be reduced slightly each year until the program expires in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit will apply to you is to speak with your local Franklin solar panel installers directly.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more are often offered at the state and local level. Certain incentives are ongoing, while others might only be available for a limited time. Solar incentives may be provided by your county or municipality, or by the New Jersey government.
Next Steps for Installing Solar in Franklin
Solar incentives might come from the federal government, the New Jersey government or your local utility company. The growing number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Call your local solar panel installation expert today to discover more about the various programs and to save the most money possible on solar panels for your Franklin home.
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EcoWatch's Franklin, NJ Solar Incentives FAQs
What if I am planning to add solar panels to a vacation home, rental property or commercial property? Can I still qualify for incentives?
Many solar incentives are intended to apply to a property located within the United States that you own, and most secondary residences fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to fully understand what incentives apply to your specific situation.
How much will a solar system save me annually on my electric bill in Franklin?
Generally, Franklin homeowners who install solar panels save approximately $753.91 per year, or approximately $14,324.20 over 20 years after making the switch.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order that incentives will be applied in may vary depending on which incentives you are claiming but generally yes, you can receive multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to be sure you are claiming all the incentives you are eligible for and applying them in the correct order.
Can I use both solar and another type of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to discuss your ideas with your local Franklin solar installation expert. They can help you with the plan for your project and give you an understanding of various incentives that you may or may 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.