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

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

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

Solar incentives are meant to help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is intended to encourage more homeowners to switch their home over to renewable energy. You may be eligible for various kinds of incentives, such as 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 state of New Jersey and others from the federal government. You might qualify for any of the following types of solar incentives:

• Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce over a specific (generally small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and similar incentives are typically given at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.
• Rebates: Rebates, or partial refunds after a purchase, are usually applied prior to any solar tax credits being calculated. These rebates might be given by your local utility company, by your state or by your county.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Net Metering: Don't forget to speak to your North Caldwell utility company about signing a net metering agreement. This allows you to receive 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.
• Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, which is 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 paying property tax on your house.

Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of your solar system's cost.

The ITC initially applied to 30% of the total cost of installing solar panels, and has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC can be applied 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 better understand how the ITC might apply to your situation, get in touch with your local North Caldwell solar panel installer and ask for more information.

In August 2022, the ITC (now titled 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. This amount will be decreased slightly each year until the end of the current program. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local North Caldwell solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Rebates, tax credits and more might be available at a more local level. Certain incentives are ongoing, while others might only be available for a limited time. They might be given by the New Jersey government, or by your county or municipality.

Next Steps for Installing Solar in North Caldwell

Solar energy use nationwide has increased enormously in the last 15 years, in part due to the proliferation of solar incentives. You might receive these incentives from your local utility company, the New Jersey government or the federal government. Getting in touch with your local North Caldwell solar panel installation company is the right first step towards getting all the incentives you qualify for when you switch to solar energy.