2025 Solar Incentives Guide for Manchester, NJ - Tax Credits & Rebates

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

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

Solar incentives are designed to mitigate the cost of installing solar panels on your home. Financial incentives like these are in place to encourage more homeowners to convert their home partially or fully to renewable energy. These incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the state of New Jersey and some by your utility company, county or municipality. Types of solar incentives might include:

• Net Metering: Net metering factors in after your solar system is up and running. If you have in place a net metering agreement with your Manchester utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, 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 decrease, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are usually handled at the state level. Once your solar system meets a certain threshold (normally a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you make is generally considered part of your taxable income.
• Tax Exemptions: These might come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when paying property tax on your house. You may also qualify for an exemption on sales tax at the time of purchase.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. These may be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC offers a tax credit for a specific percentage of the cost of your solar system.

The ITC covers solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. You can receive this credit for solar panels installed on a primary or secondary residence that you own in the United States. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.

To understand exactly how much money the ITC could save you, speak with your local Manchester solar panel installer.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit. The amount will decrease slightly on a yearly basis until the end of the current program. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. Your local Manchester solar panel installer can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Manchester

The large number of available solar incentives has contributed greatly to the increase in the use of solar power nationwide over the past 15 years. You may receive solar incentives from the New Jersey government, the federal government or your local utility company. We recommend talking to your local Manchester solar installation company to learn more about these incentives and to be sure that you're getting the most money possible for your solar panels.