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

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

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

The phrase "solar incentives" covers a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are handled by the New Jersey government or by your utility company, county or municipality. Categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if the solar system on your home produces more than a specified (generally small) amount of electricity. These types of incentives are normally handled by the state government. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.
• Tax Exemptions: Your solar panel system could qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when you are calculating property taxes on your house.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement with your Livingston utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other places you might receive a refund equivalent to a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• Rebates: Solar rebates might be provided by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after your purchase of a solar system and before tax credits are calculated.

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a certain percentage of the money you spend installing solar panels.

The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. Initially, the ITC applied to 30% of all installation costs (panels, labor, accessories and equipment), although the covered amount has fluctuated over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Your local Livingston solar panel installer can provide you with more information about the ITC and how it may apply to your situation.

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 new Clean Energy Credit now runs until 2035. Homeowners can now apply for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This new credit will then decrease annually until the date of expiration. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit applies to you, speak with your local Livingston solar installers.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more might also be offered at the local or state level. Some incentives are ongoing, while others might only be available for a limited time. Incentives might be given by your county or municipality, or by the New Jersey government.

Next Steps for Installing Solar in Livingston

There are a variety of solar incentives: those provided by local utility companies, those provided by the federal government and those provided by the New Jersey government, to name a few. Solar energy use has increased tremendously in the last 15 years, partially due to these incentives. If you're prepared to make the change to solar energy, calling your local Livingston solar panel installation expert is a great first step.