2025 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/

The phrase "solar incentives" broadly refers to financial incentives that are in place to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. You might qualify for different types of incentives, including cash back, discounts 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. You might qualify for any of the following types of solar incentives:

• Rebates: Solar rebates may be provided by your state or county, or by your local utility company. These rebates are essentially partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or similar performance-based incentives. SRECs and similar incentives are normally handled at the state level.
• Tax Exemptions: Sales tax exemptions are effective at the time of purchase 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.
• Net Metering: Be sure to speak with your New Providence utility company about signing a net metering agreement. This will allow you to receive credit towards your utility bill every month 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

Federal incentives are the type of incentives that you are most likely to have heard of. A federal incentive many people are likely 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 solar panels installed after January 1, 2006, on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost – for panels, equipment, labor and accessories – although the percentage may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

To know exactly how much money the ITC could save you, get in touch with your local New Providence solar panel installation expert.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit is valid 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 then decrease slightly each year until the end of the current program. The program expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.

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 will apply to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these may include tax credits, rebates and more. These solar incentives — which might be provided by the state of New Jersey, or by your county or municipality — may be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in New Providence

You can apply for and receive solar incentives from the New Jersey government and the federal government, as well as from your local utility company. The increased availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. When you're prepared to switch over to solar energy, calling your local New Providence solar panel installation expert is a great first step.