2023 Solar Incentives Guide for Montclair, NJ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Montclair.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Montclair?
Solar Energy Sales Tax Exemption
Successor Solar Incentive (SuSI) Program
Small Net-Metered Non-Residential located on Rooftop, Carport, Canopy and Floating Solar
Projects smaller than 1 MW (dc): $100/SREC-II, $120 for public entities
Projects 1 MW to 5 MW (dc): $90/SREC-II, $110 for public entities
Net Metered Non-Residential Ground Mount
Projects smaller than 1 MW (dc): $85/SREC-II, $105 for public entities
Projects 1 MW to 5 MW (dc): $80/SREC-II, $100 for public entities
Community Solar LMI: $90/SREC-II
Community Solar Non-LMI: $70/SREC-II
Property Tax Exemption for Renewable Energy Systems
Solar Renewable Energy Certificates (SRECs) Registration Program
In June 2016, SREC traded at an average price of $229.90.
PSE&G - Solar Loan Program
NJ Clean Energy- Residential New Construction Program
Single family homes: Ranges from $1,125 to - 24,250
Multi-single homes: Ranges from $1,125 to $18,188
Multifamily homes: Ranges from $625-$12,125
Home Performance with ENERGY STAR Program
Single family : $2,000 to $4,000
Multi-family : $500-$1,500 per unit
Rebates for single family and multi-family should not exceed 50% of the cost of the measures used to calculate total estimated savings (TES)
See table below for details
Single-family: $5,000 (Tier II) or $10,000 (Tier III) 4.99% interest loans up to $15,000 (where utility 0% financing is unavailable)
Ductless Mini Split A/C or Heat Pump: $500
Air Source Heat Pump: $300 (Tier 1), $500(Tier 2)
Geothermal Heat Pump: $500
NJ Clean Energy- WARMAdvantage Program (Electric and Gas)
Solar Hot Water Heater: $1,200
Heat Pump Water Heater: $500
Geothermal Heat Pump: $500
Air-Source or Ductless Mini-Split Heat Pump: $300- $500
Residential Gas Customers (including propane):
Gas Furnace: $250- $500
Gas Boiler: $300
Gas Water Heater: $300
Solar Hot Water Heater: $1,200
Oil Heating Customers:
Oil Furnace: $250
Oil Boiler: $300
Boiler and Water Heater Combination Rebate: $700
Furnace and Water Heater Combination Rebate: $700- $950
New Jersey Renewable Energy Incentive Program (Sustainable Biopower)
Federal Residential Renewable Energy Tax Credit
Solar incentives are meant to encourage people to switch their home over to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. These incentives may include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the New Jersey government and some by your utility company, county or municipality. Some broad categories of solar incentives include:
- Rebates: A rebate is a partial refund after the purchase of your solar system. Rebates might 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 calculating tax credits.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if your solar system produces over a specified (usually small) amount of electricity. Performance-based incentives are typically handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions let you exclude the added value of your solar system when you're calculating how much property tax you need to pay on your home.
- Net Metering: Be sure to speak to your Montclair utility company about signing a net metering contract. 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.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. 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 predetermined percentage of the cost of your solar system.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost — for panels, equipment, accessories and labor — although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.
To more fully understand how the ITC might apply to you, contact your local Montclair solar panel installation expert and ask for more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now referred to as the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After this, the percentage will be reduced slightly each year until the program expires in 2035. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit might apply to you, get in touch with your local Montclair solar installation company.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more may be offered at the local or state level. Certain incentives are ongoing, while others are available for a limited time. These incentives may be offered by the New Jersey government, or by your county or municipality.
Next Steps for Installing Solar in Montclair
The variety of solar incentives available has contributed greatly to the increase in the adoption of solar energy nationwide over the last 15 years. You might qualify for solar incentives from the New Jersey government, the federal government or your local utility company. If you're ready to switch over to solar energy, reaching out to your local Montclair solar panel installation expert is an excellent place to start.
EcoWatch's Montclair, NJ Solar Incentives FAQs
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