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

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

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

The phrase "solar incentives" refers to a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Solar incentives may include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of New Jersey and some by your specific utility company, county or municipality. Types of solar incentives might include:

• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
• Rebates: Rebates, or partial refunds after a purchase, are normally given prior to any solar tax credits being calculated. Solar rebates can be provided by your local utility company, by your state or by your county.
• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions let you exclude the added value of your solar system when calculating the amount of property tax you need to pay on your house.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes 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 similar performance-based incentives. These kinds of incentives are normally handled by your state government.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you've signed a net metering agreement with your Morris utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some knowledge of. 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 specific percentage of the cost of your solar system.

The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. The ITC originally paid out 30% of all system costs (panels, accessories, equipment and labor), although the covered amount has fluctuated over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.

To better understand how the ITC might apply to your situation, speak to your local Morris solar panel installation expert and ask for more information.

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 runs until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. The amount will decrease slightly on a yearly basis until the end of the current program. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. Your local Morris solar panel installer can answer your questions and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more may be available at a more local level. Some incentives are ongoing, while others are available for a limited time. Incentives may be offered by your county or municipality, or by the New Jersey government.

Next Steps for Installing Solar in Morris

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 increased enormously in the last 15 years, partially due to these incentives. Call your local solar panel installer today to find out more information and to save as much money as possible on a solar system for your Morris home.