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

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

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

The phrase "solar incentives" refers to financial incentives put in place by solar companies and the government to encourage increased use of renewable energy by making installing and using solar panels more affordable. You might be eligible for several types of incentives, including discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of New Jersey and others from the federal government. You might qualify for any of the following types of solar incentives:

• Net Metering: Net metering factors in after your solar panels are up and running. If you have in place a net metering agreement with your Holmdel utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to 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.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled by your state government. Once your solar panel system meets a certain threshold (usually a small amount of energy production), you are eligible to receive SRECs that can be sold to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
• Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually come off the total price before tax credits are calculated.
• Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when calculating property taxes on your house.

Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of the cost of your solar system.

The ITC can be applied to solar systems installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, equipment, accessories and labor — although that amount may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

To more fully understand how the ITC could apply to your situation, contact your local Holmdel solar panel installer and request more information.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit re-raises the credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After 2032, the credit percentage will see a slight decrease annually until the end of the program in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. The best way to learn more about how the new Clean Energy Credit will apply to you is to reach out to your local Holmdel solar panel company with your questions.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Holmdel

The expanding number of solar incentives available has helped tremendously increase the nationwide adoption of solar energy over the last 15 years. You can get solar incentives from your local utility company, the federal government or the New Jersey government. If you're prepared to switch over to solar energy, talking to your local Holmdel solar panel installation expert is a great first step.