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

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

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

The term "solar incentives" broadly refers to financial incentives implemented by the government and by solar companies to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. Solar incentives might include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the state of New Jersey and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement in place with your Matawan utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you may be refunded a percentage of the value.
• Rebates: Rebates, or cash back after a purchase, are usually applied prior to any solar tax credits being calculated. These rebates might be provided by your local utility company, by your state or by your county.
• Tax Exemptions: Your solar 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 allow you to exclude the value that solar panels add when you are calculating property taxes on your house.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (normally small) amount of electricity can qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically offered by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a certain percentage of the money you spend on solar panels for your home.

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

To better understand exactly how much the ITC could save you, get in touch with your local Matawan solar panel installer.

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 re-raises the credit up to 30% for solar systems installed between 2022 and 2032. After 2032, the percentage will see a slight decrease annually until the end of the program in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems with the new act.

Click here to learn more about the new Inflation Reduction Act. Your local Matawan solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. Like with federal incentives, these can include rebates, tax credits and more. These incentives may be given out by the New Jersey government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Matawan

There are many kinds of solar incentives: those given by local utility companies, those given by the New Jersey government and those given by the federal government, to name a few. The use of solar energy has grown enormously in the last 15 years, partially thanks to these incentives. Reaching out to your local Matawan solar panel installation company is the best first step towards getting the most money possible when you switch to solar energy.