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

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

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

The term "solar incentives" broadly refers to financial incentives put in place by solar companies and the government to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. Incentives could 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 New Jersey government or by your utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
• Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually come off the total price before any tax credits are calculated.
• Net Metering: Don't forget to speak to your Little Falls utility company about signing a net metering agreement. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce more than a predetermined (usually small) amount of electricity will qualify for SRECs or similar performance-based incentives. SRECs and the like are typically provided at the state level. SRECs can be sold to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Tax Exemptions: Your solar panels could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when you are calculating property taxes on your house.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. One of the incentives that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of your solar system's cost.

The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC initially covered 30% of all system installation costs (panels, accessories, labor and equipment), although the 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 amount you can claim.

Your local Little Falls solar panel installer can offer more information about the ITC and how it applies to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now dubbed the Clean Energy Credit. The new Clean Energy Credit extends until 2035. American homeowners can now receive a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. The credit will then decrease annually until the date of expiration. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. Your local Little Falls solar panel installer can answer your questions and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

Tax credits, rebates and more might be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives could come from the New Jersey government, or from your specific county or municipality.

Next Steps for Installing Solar in Little Falls

Nationwide solar energy use has increased enormously in the last 15 years, in part thanks to the proliferation of solar incentives. You might receive these incentives from your local utility company, the federal government or the New Jersey government. Speak with your local solar panel installer today to learn more and to save the most money possible on solar panels for your Little Falls home.