2025 Solar Incentives Guide for Paramus, NJ - Tax Credits & Rebates

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

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

The phrase "solar incentives" refers to financial incentives designed to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. Various kinds of incentives, including cash back, discounts 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. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a predetermined (usually small) amount of electricity will qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically provided at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions allow you to exclude the value that your solar panels add when you're calculating how much property tax you need to pay.
• Rebates: Rebates, or partial refunds after a purchase, are normally given before any solar tax credits are calculated. These rebates may be offered by your local utility company, by your county or by your state.
• Net Metering: Net metering factors in after your solar panels are up and running. If you have in place a net metering agreement with your Paramus utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in others you might get refunded a percentage of the value.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a specified percentage of the money you spend on your solar system.

The ITC was originally for 30% of the cost of solar panel installation, 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 equipment, accessories and labor. There is no maximum amount you can claim. The ITC applies to solar panels 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 could apply to your situation, call your local Paramus solar panel installation expert and request more information.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled 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 see a slight decrease annually until the program expires in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

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

State & Local Solar Incentives

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

Next Steps for Installing Solar in Paramus

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. Growing availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Your local Paramus solar panel installer can help you learn more about which incentives you should apply for, and get you feeling good about making the change to renewable energy today.