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

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Solar incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the New Jersey government and some by your specific utility company, county or municipality. Types of solar incentives might include:

• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
• Rebates: Rebates, or partial refunds after a purchase, are normally given before any solar tax credits are calculated. These rebates can be provided by your local utility company, by your county or by your state.
• Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your house.
• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce over a threshold (generally small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and performance-based incentives in general are typically provided at the state level. SRECs can be sold to your utility company or another buyer, and this is usually considered part of your taxable income.
• Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have a net metering agreement with your Lawrenceville utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other places you may make back a percentage of the value.

Federal Solar Incentives

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

The ITC can be applied to solar panels 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, accessories, labor and equipment — although the percentage may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

Wondering how the ITC applies to your specific situation? Reach out to your local Lawrenceville solar panel installation expert to get more information.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners may be eligible for a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Lawrenceville solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more can be offered at a more local level. These incentives — which might be handled by the state of New Jersey, or by your county or municipality — could be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Lawrenceville

You can apply for solar incentives from the New Jersey government and the federal government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. If you're ready to make the change to solar energy, reaching out to your local Lawrenceville solar panel installation expert is a great first step.