2024 Solar Incentives Guide for Gloucester City, NJ - Tax Credits & Rebates

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

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The phrase "solar incentives" refers broadly to financial incentives put in place by solar companies and the government to encourage the use of renewable energy by making the installation and use of solar panels more affordable. You may be eligible for several types of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the New Jersey government and others from the federal government. Types of solar incentives might include:

• Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when paying property tax on your house.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are usually handled at the state level. Once your solar panel system meets the threshold (normally 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 make from the sale is generally considered part of your taxable income.
• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Net Metering: Net metering becomes relevant once your solar system is up and running. If you've signed a net metering agreement with your Gloucester City utility company, the company 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 might make back a percentage of the value.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. These may be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.

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Federal Solar Incentives

When thinking about solar incentives, federal incentives may be 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 specified percentage of the money you spend installing solar panels.

The ITC applies to the total cost of installing a solar system, including the panels themselves as well as equipment, accessories and labor. This credit can be claimed 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. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.

Speaking with your local Gloucester City solar panel installation expert is the best way to understand how the ITC could apply to you.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. With the new provisions, solar installation projects started after January 1, 2022, and completed by the end of 2032, can qualify for a 30% tax credit. This credit amount will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion to the program 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 Gloucester City solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Rebates, tax credits and more can be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones, too. These solar incentives — which may be handled by the state of New Jersey, or by your county or municipality — may be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Gloucester City

You can apply for and receive solar incentives from the federal government and the New Jersey government, as well as from your local utility company. The increased availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. When you're ready to make the change to solar energy, getting in touch with your local Gloucester City solar panel installation expert is an excellent place to start.