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

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

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

The phrase "solar incentives" refers to a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various kinds of incentives, such as cash back, discounts or monthly utility bill credits, may be available to you. Some incentives may be offered by the New Jersey government, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:

• Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions let you exclude the value added by your solar system when calculating how much property tax you need to pay on your house.
• Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives might be available to you if the solar system on your home produces more than a specified (generally small) amount of electricity. This category of incentives is typically handled by the state government. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
• Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your New Milford utility company, the company 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 others you may get refunded a percentage of the value.
• Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. Any rebates you receive will usually come off the total price before any tax credits are calculated.

Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of the cost of your solar system.

The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence that you own in the United States. 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 project was undertaken. There is no cap on the claim amount.

Your local New Milford solar panel installation expert can offer more information about the ITC and how it may apply to your situation.

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. At this point, the credit percentage will be reduced slightly each year until the program expires in 2035. Starting in 2023, the program 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. The best way to understand how the new Clean Energy Credit will apply to you is to talk with your local New Milford solar panel installation expert.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these might include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. Local solar incentives might come from the New Jersey government, or from your specific county or municipality.

Next Steps for Installing Solar in New Milford

Solar incentives may come from the federal government, the New Jersey government or your local utility company. The variety of available incentives has facilitated the nationwide growth of solar energy use in the last 15 years. When you're ready to switch over to solar energy, getting in touch with your local New Milford solar panel installation expert is an excellent place to start.