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

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. The incentives could 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 specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Rebates: Rebates, or partial refunds after a purchase, are typically given prior to any solar tax credits being calculated. Solar rebates can be offered by your local utility company, by your state or by your county.
• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Kearny utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if you have a solar system that produces more than a specified (usually small) amount of electricity. These types of incentives are usually handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is normally considered part of your taxable income.
• Tax Exemptions: Your solar panels may 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 added value of the solar panels when you are calculating property taxes on your home.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of the cost of your solar system.

The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. You can receive this credit for a solar panel system installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.

Contacting your local Kearny solar panel installation expert is the best way to learn more about how the ITC may apply to you.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After 2032, the percentage will decrease slightly each year until the end of the program in 2035. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit applies to you, reach out to your local Kearny solar installation expert.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more may be available at a more local level. These incentives may be provided by your county or municipality, or by the New Jersey government. Some incentives may be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Kearny

You can qualify for solar incentives from the New Jersey government and the federal government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Speaking with your local Kearny solar panel installation company is a great first step towards getting all the incentives you qualify for when you switch to solar energy.