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

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

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

Solar incentives are meant to help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is intended to encourage more homeowners to make the switch to renewable energy. Various types of incentives, like discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be offered by the New Jersey government, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:

• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that normally counts as part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system can earn SRECs or similar performance-based incentives. SRECs and similar incentives are typically handled by your state government.
• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions allow you to exclude the value added by your solar system when calculating the amount of property tax you need to pay on your home.
• Rebates: Solar rebates can be provided by your county or state, or by your local utility company. These rebates are essentially cash back that is applied after you purchase a solar system and before tax credits are calculated.
• Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Gloucester utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in others you might receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a predetermined percentage of the money you spend installing solar panels.

The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC initially covered 30% of all costs (panels, labor, equipment and accessories), although the covered amount has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.

To best understand how the ITC might apply to your situation, speak to your local Gloucester solar panel installation expert and ask for more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar systems installed between 2022 and 2032. After this, the credit percentage will decrease slightly each year until the program expires in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems with the new act.

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

State & Local Solar Incentives

Tax credits, rebates and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. These incentives might be handled by the New Jersey government, or by your county or municipality. Certain incentives are available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Gloucester

Nationwide solar energy use has increased enormously in the last 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from your local utility company, the New Jersey government or the federal government. When you're ready to make the change to solar energy, getting in touch with your local Gloucester solar panel installation expert is a great first step.