2025 Solar Incentives Guide for Franklin Lakes, NJ - Tax Credits & Rebates

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

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

The term "solar incentives" refers to a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may be eligible for several kinds of incentives, such as discounts, cash back or monthly utility bill credits, 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. You might qualify for any of the following types of solar incentives:

• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits are different from tax deductions.
• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a predetermined (usually small) amount of electricity will qualify for SRECs or other similar performance-based incentives. SRECs and the like are typically provided by your state government. You can sell SRECs to your utility company or another buyer, and this is usually considered part of your taxable income.
• Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to ignore the value added by your solar panels when calculating the taxes you pay on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have a net metering agreement with your Franklin Lakes utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually come off your total price before any tax credits are calculated.

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on your solar system.

The ITC is applied to the total cost of solar system installation, including the panels themselves as well as labor, accessories and equipment. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.

To better understand how the ITC might apply to your situation, contact your local Franklin Lakes solar panel installation expert and ask for more information.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The Clean Energy Credit runs until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; the amount will be decreased slightly each year until the end of the current program. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. Your local Franklin Lakes solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Franklin Lakes

The large number of available solar incentives has helped tremendously increase the use of solar power nationwide over the past 15 years. You can get solar incentives from your local utility company, the federal government or the New Jersey government. Speak with your local solar panel installation company today to discover more about the various programs and to save as much money as possible on solar panels for your Franklin Lakes home.