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

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

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

The phrase "solar incentives" generally refers to financial incentives put in place by solar companies and the government to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. Solar incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given 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:

• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your Irvington utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other areas you might make back a percentage of the value.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
• Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions let you ignore the value added by your solar system when you calculate the amount of property tax you need to pay on your home.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are generally handled at the state level. Once your solar system meets a predetermined threshold (generally a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you make 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 offer limited-time rebates at various times. The value of a rebate will usually be deducted from your total price before tax credits are calculated.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specified percentage of your solar system's cost.

The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC originally paid out 30% of all system costs (panels, accessories, labor and equipment), although the covered amount has fluctuated over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

Reaching out to your local Irvington solar panel installation expert is the best way to learn more about how the ITC applies to you.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit. The amount will decrease slightly each year until the current program ends. Starting in 2023, it will also be easier to claim credits for energy storage systems with the new act.

Click here to learn more about the new Inflation Reduction Act. Your local Irvington 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 may be provided by state and local governments. Similar to federal incentives, these could include tax credits, rebates and more. Certain incentives are offered for only a limited time, while others are ongoing. Local solar incentives might come from your county or municipality, or from the New Jersey government.

Next Steps for Installing Solar in Irvington

You can qualify for solar incentives from the New Jersey government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Talking to your local Irvington solar panel installation company is the right first step towards getting the most money possible when you switch to solar energy.