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

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

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

Solar incentives are meant to encourage homeowners to make the switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Various types of incentives, such as cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be handled by the state of New Jersey, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:

• Rebates: Rebates, or cash back after a purchase, are typically given before any solar tax credits are calculated. Rebates may be provided by your local utility company, by your state or by your county.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions let you ignore the value added by your solar system when you calculate the amount of property tax you need to pay on your house.
• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce more than a predetermined (generally small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically given at the state level. SRECs can be sold to your utility company or another buyer, and this is usually considered part of your taxable income.
• Net Metering: Don't forget to talk to your New Providence utility company about signing a net metering contract. This allows you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. A federal incentive many people are probably 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 applies to the value of a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Initially, the ITC applied to 30% of all system installation costs (panels, equipment, labor and accessories), although the amount has fluctuated slightly 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 amount you can claim.

Wondering how the ITC applies to your specific situation? Get in touch with your local New Providence solar panel installation expert to get more information.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. Your local New Providence solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in New Providence

You can qualify for solar incentives from the New Jersey government and the federal government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. If you're ready to make the switch to solar energy, calling your local New Providence solar panel installation expert is an excellent place to start.