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

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

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

Solar incentives are meant to help mitigate the cost of installing solar panels on your home. This category of financial incentives is in place to encourage more people to switch to renewable energy. You might qualify for several kinds of incentives, including discounts, cash back 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. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled at the state level. Once your solar system meets the threshold (typically a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you make is generally considered part of your taxable income.
• Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when calculating property tax for your home.
• Net Metering: Don't forget to speak with your New Brunswick 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 might receive either a dollar-for-dollar credit or a percentage of the value.
• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. Any rebates you receive will usually be deducted from your total price before tax credits are calculated.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.

Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. A federal incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of the cost of your solar system.

The ITC originally covered 30% of the cost of solar panel installation, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. 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 applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.

To find out exactly how much the ITC could save you, get in touch with your local New Brunswick solar panel installation expert.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now referred to as the Clean Energy Credit. Homeowners can now receive a credit of 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. The percentage will then begin to decrease on a yearly basis until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.

More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit might apply to you is to reach out to your local New Brunswick solar panel company with your questions.

State & Local Solar Incentives

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

Next Steps for Installing Solar in New Brunswick

Solar incentives may come from your local utlity company, the New Jersey government or the federal government. The large number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Reaching out to your local New Brunswick solar panel installation expert is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.