2023 Solar Incentives Guide for Paterson, NJ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Paterson.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Paterson?
Solar Energy Sales Tax Exemption
Successor Solar Incentive (SuSI) Program
Small Net-Metered Non-Residential located on Rooftop, Carport, Canopy and Floating Solar
Projects smaller than 1 MW (dc): $100/SREC-II, $120 for public entities
Projects 1 MW to 5 MW (dc): $90/SREC-II, $110 for public entities
Net Metered Non-Residential Ground Mount
Projects smaller than 1 MW (dc): $85/SREC-II, $105 for public entities
Projects 1 MW to 5 MW (dc): $80/SREC-II, $100 for public entities
Community Solar LMI: $90/SREC-II
Community Solar Non-LMI: $70/SREC-II
Property Tax Exemption for Renewable Energy Systems
Solar Renewable Energy Certificates (SRECs) Registration Program
In June 2016, SREC traded at an average price of $229.90.
PSE&G - Solar Loan Program
NJ Clean Energy- Residential New Construction Program
Single family homes: Ranges from $1,125 to - 24,250
Multi-single homes: Ranges from $1,125 to $18,188
Multifamily homes: Ranges from $625-$12,125
Home Performance with ENERGY STAR Program
Single family : $2,000 to $4,000
Multi-family : $500-$1,500 per unit
Rebates for single family and multi-family should not exceed 50% of the cost of the measures used to calculate total estimated savings (TES)
See table below for details
Single-family: $5,000 (Tier II) or $10,000 (Tier III) 4.99% interest loans up to $15,000 (where utility 0% financing is unavailable)
Ductless Mini Split A/C or Heat Pump: $500
Air Source Heat Pump: $300 (Tier 1), $500(Tier 2)
Geothermal Heat Pump: $500
NJ Clean Energy- WARMAdvantage Program (Electric and Gas)
Solar Hot Water Heater: $1,200
Heat Pump Water Heater: $500
Geothermal Heat Pump: $500
Air-Source or Ductless Mini-Split Heat Pump: $300- $500
Residential Gas Customers (including propane):
Gas Furnace: $250- $500
Gas Boiler: $300
Gas Water Heater: $300
Solar Hot Water Heater: $1,200
Oil Heating Customers:
Oil Furnace: $250
Oil Boiler: $300
Boiler and Water Heater Combination Rebate: $700
Furnace and Water Heater Combination Rebate: $700- $950
New Jersey Renewable Energy Incentive Program (Sustainable Biopower)
Federal Residential Renewable Energy Tax Credit
The term "solar incentives" refers broadly to financial incentives that are in place to encourage people to use renewable energy by making solar panels more affordable. Different kinds of incentives, like cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be offered by the New Jersey government, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:
- Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. These rebates can be offered by your local utility company, by your county or by your state.
- Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a specified (generally small) amount of electricity qualify for SRECs or other similar performance-based incentives. SRECs and the like are typically provided by your state government. SRECs can be sold to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your Paterson 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 credit is dollar-for-dollar, while in other places you might make back a percentage of the value.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
- Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the added value of your solar system when you calculate how much property tax you need to pay on your home.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. An incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of the cost of your solar system.
The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost — for panels, equipment, accessories and labor — although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
Have questions about how the ITC applies to your specific situation? Contact your local Paterson solar panel installation expert to get more information.
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 lasts until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit; this amount will be decreased slightly on a yearly basis until the current program ends. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. Your local Paterson solar panel installation experts can answer your questions and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Tax credits, rebates and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. These incentives might be given out by your county or municipality, or by the New Jersey government. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Paterson
There are many types of solar incentives: those given by local utility companies, those given by the New Jersey government and those given by the federal government, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially due to these incentives. We recommend talking to your local Paterson solar installation expert for more information about these incentives and to be sure that you're getting the most money possible for your solar system.
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EcoWatch's Paterson, NJ Solar Incentives FAQs
Can I claim incentives for adding solar panels to a rental property, vacation home or commercial property?
While we recommend getting in touch with your local solar installer and/or tax professional to best understand what solar incentives apply to you, many can be claimed on a second home, as long as it is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the specifics.
How do I learn if I qualify for solar incentives?
Broadly, solar incentives apply to:
- a new solar panel system
- installed on property you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those given out by the New Jersey government or by your county/municipality, could have additional qualifications. Speak with your local Paterson solar installer to find out what incentives your project may qualify for.
What are the best solar panel installation companies near me?
To learn about the top solar panel installation companies near you, read our article on the top solar companies in Paterson.
What are the environmental benefits of switching to solar energy?
You can decrease your carbon footprint by 250 pounds of CO2 a year by installing solar panels. This adds up to around 5,000 pounds in 20 years. In addition, solar power is a renewable energy source, meaning that making the switch reduces the drain on our planet's resources.
If I change out my appliances for ones that can use solar energy, are there any credits I can claim?
With the passage of the new Inflation Reduction Act, there are a number of new financial incentives to encourage you to make eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.