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

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

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

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.