2023 Solar Incentives Guide for Palisades Park, NJ - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Palisades Park?

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

Solar incentives are intended to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Various kinds of incentives, like discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be handled by the New Jersey government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:

• 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 value added by your solar system when calculating property tax for your home.
• Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. Rebates may be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Palisades Park utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other areas you might make back a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. Typically, a certain (small) threshold of energy production must be met before your solar system qualifies for SRECs or other performance-based incentives. Incentives like these are typically handled at the state level.
• Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. Tax credits differ from tax deductions.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a predetermined percentage of the money you spend installing solar panels.

The ITC originally covered 30% of the cost of installing a solar system, although it has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum claim amount. 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.

Reaching out to your local Palisades Park solar panel installation expert is the best way to understand how the ITC applies to you.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After this, the percentage will decrease slightly each year until the end of the program in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems with the new act.

Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit might apply to you, speak with your local Palisades Park solar installation expert.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these could include rebates, tax credits and more. Some incentives are ongoing, while others might only be available for a limited time. Incentives may be given by the New Jersey government, or by your county or municipality.

Next Steps for Installing Solar in Palisades Park

The nationwide use of solar energy has gone up significantly in the last 15 years, in part due to the growth in the number of solar incentives. You may get these incentives from the New Jersey government, the federal government or your local utility company. Talking to your local Palisades Park solar panel installer is an excellent first step towards getting the most money possible when you switch to solar energy.