2023 Solar Incentives Guide for Hillsborough, NJ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Hillsborough.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Hillsborough?
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.
PSE&G - Solar Loan Program
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
Solar incentives are meant to encourage homeowners to make the switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Incentives can include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are offered by the state of New Jersey or your utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: Be sure to speak to your Hillsborough utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
- Tax Exemptions: Your solar panel system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when calculating property taxes on your house.
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if your solar system produces over a specified (generally small) amount of electricity. Performance-based incentives are usually handled at the state level. You can sell any SRECs you have to your utility company or other buyers, and the money you make is usually considered part of your taxable income.
- Rebates: Solar rebates may be provided by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
Federal Solar Incentives
When someone says "solar incentives," you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC provides a tax credit for a set percentage of the cost of your solar system.
The ITC can be applied to the total cost of solar panel installation, including the panels themselves as well as labor, equipment and accessories. 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. 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 claim amount.
To best understand how the ITC could apply to you, speak to your local Hillsborough solar panel installer and request more information.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Under the new program, solar installation projects started after January 1, 2022 and completed by the end of 2032 can qualify for a 30% tax credit. This percentage will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit applies to you, reach out to your local Hillsborough solar installation expert.
State & Local Solar Incentives
Tax credits, rebates and more might be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Incentives may be provided by your county or municipality, or by the state of New Jersey. Certain incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Hillsborough
Solar energy use nationwide has gone up tremendously in the past 15 years, in part due to the proliferation of solar incentives. You can obtain these incentives from the federal government, the New Jersey government or your local utility company. If you're prepared to switch over to solar energy, calling your local Hillsborough solar panel installation expert is an excellent place to start.
EcoWatch's Hillsborough, NJ Solar Incentives FAQs
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