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

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

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

Solar incentives encourage homeowners to make the switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. These incentives might include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of New Jersey and some by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if you have a solar system that produces over a specified (typically small) amount of electricity. These types of incentives are usually handled at the state level. You can sell any SRECs you have to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.
• Tax Exemptions: These can come in the form of property tax exemptions, which allow you to ignore the value of your solar system when paying property tax on your home. You could also look for exemptions on sales tax at the time of purchase.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement with your Passaic utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other places you may get refunded a percentage of the value.
• Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. Solar rebates might be provided by your local utility company, by your state or by your county.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a specified percentage of the money you spend installing solar panels.

The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006, on a property owned by you for you to claim the credit. The ITC initially covered 30% of all system installation costs (panels, accessories, equipment and labor), although this amount has fluctuated over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

Reaching out to your local Passaic solar panel installation expert is the best way to learn more about how the ITC could apply to you.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. After 2032, the percentage will decrease slightly each year until the end of the program in 2035. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. Your local Passaic solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these could include rebates, tax credits and more. These incentives may be handled by the New Jersey government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Passaic

The large number of solar incentives available has enormously increased the adoption of solar energy nationwide over the past 15 years. You can get solar incentives from the federal government, the New Jersey government or from your local utility company. We recommend talking to your local Passaic solar installer for more information about these incentives and to make sure that you're getting the largest number possible for your solar system.