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

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

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

The phrase "solar incentives" includes a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may qualify for several kinds of incentives, such as cash back, discounts or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the New Jersey government and others from the federal government. Categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or other performance-based incentives. Incentives like these are normally handled at the state level.
• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when paying property tax on your house.
• Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Metuchen utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
• Rebates: Solar rebates can be provided by your county or state, or by your local utility company. These rebates are essentially cash back that is applied after you purchase solar panels and before tax credits are calculated.
• 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.)

Federal Solar Incentives

When thinking about solar incentives, federal incentives may be the first thing that comes to mind. 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 percentage of the cost of your solar system.

The ITC originally covered 30% of the total cost of solar panel installation, and has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

To understand exactly how much money the ITC could save you, speak with your local Metuchen solar panel installation expert.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. With the new provisions, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Metuchen solar panel company can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Like with federal incentives, these can include tax credits, rebates and more. These solar incentives — which may be provided by your county or municipality, or by the state of New Jersey — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Metuchen

You can apply for and receive solar incentives from the New Jersey government and the federal government, as well as from your local utility company. The increased availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. It is a good idea to talk to your local Metuchen solar installer to learn more about these incentives and to be sure that you're getting the largest number possible for your solar system.