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

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

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

Solar incentives help mitigate the cost of installing solar panels on your home. This category of financial incentives is in place to encourage more people to convert their home partially or fully to renewable energy. You might qualify for several types of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the New Jersey government and others from the federal government. Some broad categories of solar incentives include:

• Rebates: Rebates, or cash back after a purchase, are typically given before any solar tax credits are calculated. Rebates might be given by your local utility company, by your county or by your state.
• Net Metering: Don't forget to talk with your Montclair utility company about signing a net metering agreement. This will allow you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
• Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your home.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are generally handled at the state level. Once your solar panel system meets the threshold (normally a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you make is usually considered part of your taxable income.

Federal Solar Incentives

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

The ITC applies to the total cost of solar panel installation, including the panels themselves as well as equipment, accessories and labor. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.

Wondering how the ITC applies to your specific situation? Contact your local Montclair solar panel installation expert to get more information.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. The Clean Energy Credit runs until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; the amount will then decrease slightly on a yearly basis until the current program ends. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.

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

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 may be available at a more local level. Incentives might be offered by your county or municipality, or by the state of New Jersey. Certain incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Montclair

You can apply for and receive solar incentives from the federal government and the New Jersey government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Reaching out to your local Montclair solar panel installation company is the right first step towards getting all the incentives you qualify for when you switch to solar energy.