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

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

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

The phrase "solar incentives" includes a wide 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. The incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the state of New Jersey and some by your utility company, county or municipality. Types of solar incentives might include:

• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Net Metering: You can sign a net metering contract with your Highland Park utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your utility bill each month.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (usually small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and similar incentives are typically given at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Rebates: A rebate is a partial refund given after you've purchased your solar system. Rebates might 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.
• 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 added value of your solar system when paying property tax on your home.

Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.

The ITC can be credited towards 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 be eligible for the credit. Initially, the ITC applied to 30% of all costs (panels, equipment, accessories and labor), although the amount has fluctuated slightly over time 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.

Your local Highland Park solar panel installation expert can provide more information about the ITC and how it applies to your situation.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. 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. The amount of the credit will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Highland Park solar panel company can answer your questions and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Like with federal incentives, these could include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. Your local incentives may come from the New Jersey government, or from your specific county or municipality.

Next Steps for Installing Solar in Highland Park

There are a variety of solar incentives: those given by local utility companies, those given by the New Jersey government and those given by the federal government, to name a few. Solar energy use has increased tremendously in the last 15 years, partially thanks to these incentives. It is a good idea to talk to your local Highland Park solar installation expert to learn more about these incentives and to be sure that you're getting the most money possible for your solar panels.