2023 Solar Incentives Guide for Hanover, NJ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Hanover.
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 May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Hanover?
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.
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 that are in place to encourage the adoption and use renewable energy by making solar panels more affordable. You may qualify for different types of incentives, such as 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. Categories of solar incentives include:
- Rebates: Solar rebates might be offered by your state or county, or by your local utility company. These rebates work as cash back that is applied after you purchase solar panels and before tax credits are calculated.
- Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when calculating property tax for your home.
- Net Metering: You can sign a net metering agreement with your Hanover utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your utility bill each month.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. In most cases, you must meet a certain (small) threshold of energy production before your solar system can earn SRECs or similar performance-based incentives. SRECs and similar incentives are generally handled at the state level.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
Federal Solar Incentives
When people think of solar incentives, federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC provides a tax credit for a specific percentage of your solar system's cost.
The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as accessories, labor 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. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
To best understand how the ITC might apply to your situation, speak to your local Hanover solar panel installation expert and ask for more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. After this, the percentage will decrease slightly each year until the end of the program in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit applies to you is to get in touch with your local Hanover solar panel installation expert.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Similar to federal incentives, these may include rebates, tax credits and more. These incentives might be handled by your county or municipality, or by the New Jersey government. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Hanover
The nationwide use of solar energy has gone up tremendously in the past 15 years, in part due to the growth in the number of solar incentives. You might receive these incentives from the federal government, the New Jersey government or your local utility company. If you're prepared to make the switch to solar energy, talking to your local Hanover solar panel installation expert is a great first step.
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EcoWatch's Hanover, NJ Solar Incentives FAQs
What if I am planning to add solar panels to a vacation home, rental property or commercial property? Do I still qualify for incentives?
Many solar incentives apply to a property you own that is located within the United States; most secondary residences fall under this distinction. There may be other solar incentives available for commercial properties, depending on the details. We recommend getting in touch with your local solar installer and/or tax professional to fully understand what incentives may apply to your specific situation.
How much can I save on my electric bill annually if I add solar panels to my house in Hanover?
Typically, homeowners in Hanover who install solar panels save about $763.77 per year, or about $14,511.64 over 20 years after they make the switch.
Who installs solar panels near me?
To find a top-rated solar panel installer, check out our guide to the best solar companies in Hanover.
What are some environmental benefits of installing solar panels on my home?
Solar energy is renewable — by switching where you get your energy, you help reduce the strain on our planet's resources. A solar system can also reduce your home's CO2 emissions by 250 pounds a year, or around 5,000 pounds over 20 years.
Can I qualify for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order your incentives will be applied in could vary depending on which incentives you receive but usually yes, you can receive multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to ensure you are claiming all possible incentives and applying them in the correct order.
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.