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
Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Hillsborough solar installers to see how much you can save.
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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 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 designed to encourage people to switch their home over to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. These incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of New Jersey and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. These might be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if your solar system produces more than a specified (usually small) amount of electricity. This category of incentives is generally handled at the state level. You can sell SRECs to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you've signed a net metering agreement with your Hillsborough utility company, they 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 other places you might make back a percentage of the value.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your home.
- Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the federal government. These are different from tax deductions.
Federal Solar Incentives
Federal solar incentives are probably the first thing that you think of when you think about solar incentives. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a predetermined percentage of your solar system's cost.
The ITC covers solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
Your local Hillsborough solar panel installer can provide you with more information about the ITC and how it may apply to your situation.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Now, solar installation projects started after January 1, 2022 and completed by the end of 2032 may be eligible 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 will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit might apply to you is to get in touch with your local Hillsborough solar panel installers.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more might be available at a more local level. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives might come from the New Jersey government, or from your specific county or municipality.
Next Steps for Installing Solar in Hillsborough
Solar energy use nationwide has significantly increased in the last 15 years, in part thanks to the proliferation of solar incentives. You may get these incentives from your local utility company, the federal government or the New Jersey government. We suggest talking to your local Hillsborough solar installation expert to learn more about these incentives and to be sure that you're getting the largest number possible for your solar panels.
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EcoWatch's Hillsborough, NJ Solar Incentives FAQs
What if I want to add solar panels to a vacation home, rental property or commercial property? Can 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 reaching out to your local solar installer and/or tax professional to best understand what incentives will apply to your specific situation.
How much can I save annually on my electric bill if I install solar panels on my Hillsborough home?
Once you add solar panels to your Hillsborough home, you can expect to save around $725.75 per year, or around $13,789.23 over 20 years.
Who installs solar panel systems near me?
To learn about the best solar panel installation companies near you, read our article on Hillsborough's best solar panel companies.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly named the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I use a combination of solar and another type of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to talk through your plan with your local Hillsborough solar installer. They can help you with the plan for your project and also help you understand the various incentives that you might or might not qualify for.
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.