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

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

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

Solar incentives encourage homeowners to make the switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are provided by the state of New Jersey or your utility company, county or municipality. Some solar incentives you might qualify for are:

• Net Metering: Make sure you speak to your Jefferson utility company about signing a net metering contract. This will allow you to receive credit towards your utility bill every month for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (normally small) amount of electricity qualify for SRECs or other similar performance-based incentives. SRECs and similar incentives are typically provided by your state government. SRECs can be sold to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
• Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when calculating property tax for your home.
• Rebates: Rebates, or cash back after a purchase, are typically given prior to any solar tax credits being calculated. Rebates can be given by your local utility company, by your county or by your state.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have heard of. An incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of the cost of your solar system.

The ITC initially applied to 30% of the total cost of installing a solar system, although it has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.

To better understand how the ITC might apply to you, speak to your local Jefferson solar panel installation expert and request more information.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit might apply to you is to reach out to your local Jefferson solar panel installers with your questions.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these could include tax credits, rebates and more. These incentives might be handled by your county or municipality, or by the New Jersey government. Certain incentives are available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Jefferson

There are a number of different solar incentives: those provided by the federal government, those provided by the New Jersey government and those provided by local utility companies, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially thanks to these incentives. Reaching out to your local Jefferson solar panel installation expert is the best first step towards getting all the incentives you qualify for when you switch to solar energy.