2023 Solar Incentives Guide for Parsippany Troy Hills, NJ - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Parsippany Troy Hills?

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

Solar incentives encourage homeowners to switch their home over to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are offered by the New Jersey government or by your utility company, county or municipality. Types of solar incentives might include:

• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from the total price before any tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives might be available to you if you have a solar system that produces over a specified (typically small) amount of electricity. Performance-based incentives are usually handled by the state government. You can sell your SRECs to your utility company or other buyers, and the money you make is normally considered part of your taxable income.
• Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement in place with your Parsippany Troy Hills utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other places you may make back a percentage of the value.
• Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied when you purchase 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 house.

Federal Solar Incentives

When people think of solar incentives, federal incentives might be the first thing that comes to mind. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a specified percentage of your solar system's cost.

The ITC was originally for 30% of the cost of solar system installation, although it has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum claim amount. 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 understand exactly how much money the ITC could save you, talk to your local Parsippany Troy Hills solar panel installation expert.

The Inflation Reduction Act, passed in August 2022, added more provisions to 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 obtain credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. Your local Parsippany Troy Hills solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more can be offered at a more local level. Incentives might be provided by the state of New Jersey, or by your county or municipality. Some incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Parsippany Troy Hills

There are a number of different solar incentives: those provided by local utility companies, those provided by the New Jersey government and those provided by the federal government, to name a few. Solar energy utilization has grown tremendously in the last 15 years, partially thanks to these incentives. We recommend talking to your local Parsippany Troy Hills solar installation expert to learn more about these incentives and to make sure that you're getting the most money possible for your solar panels.