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

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

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

Solar incentives are designed to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are handled by the state of New Jersey or your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. These rebates may be given by your local utility company, by your county or by your state.
• Tax Exemptions: Tax exemptions can 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, which allows you to exclude the value added by your solar system when paying property tax on your house.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if the solar system on your home produces over a specified (typically small) amount of electricity. This category of incentives is typically handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you make is generally considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
• Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have a net metering agreement with your Middletown utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other places you may get refunded a percentage of the value.

Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC offers a tax credit for a predetermined percentage of your solar system's cost.

The ITC originally covered 30% of the cost of installing solar panels, 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 installation cost includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum claim amount. The ITC can be applied 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 find out exactly how much the ITC could save you, speak with your local Middletown solar panel installation expert.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit; the amount will decrease slightly on a yearly basis until the current program ends. Starting in 2023, it will also be easier to claim credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. Your local Middletown solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more might be available at a more local level. These incentives may be distributed 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 Middletown

You can apply for solar incentives from the federal government and the New Jersey government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. When you're ready to make the change to solar energy, talking to your local Middletown solar panel installation expert is a great first step.