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

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

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

The phrase "solar incentives" refers broadly to financial incentives that are in place to encourage increased use of renewable energy by making solar panels more affordable. Solar incentives can include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the New Jersey government and some by your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Net Metering: You can sign a net metering contract with your Pennsauken utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your monthly utility bill.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if your solar system produces over a specified (generally small) amount of electricity. Performance-based incentives are normally handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.
• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. Tax credits are different from tax deductions.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. Any rebates you receive will usually be deducted from your total price before tax credits are calculated.
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions allow you to ignore the added value of your solar system when you're calculating the amount of property tax you need to pay.

Federal Solar Incentives

When you think about solar incentives, you probably think of federal incentives first. You've likely 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 total cost of solar panel installation, and has fluctuated slightly over the last few 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, accessories and labor. There is no maximum amount you can claim. 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.

Speaking with your local Pennsauken solar panel installation expert is the best way to learn more about how the ITC may apply to your situation.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. This amount will be decreased slightly on a yearly basis until the end of the current program. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit might apply to you, reach out to your local Pennsauken solar installers.

State & Local Solar Incentives

Federal solar incentives are not your only option; rebates, tax credits and more are often offered at the local or state level. Incentives might be offered by the state of New Jersey, or by your county or municipality. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Pennsauken

Solar incentives may be provided by the New Jersey government, the federal government or your local utility company. The large number of solar incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. If you're ready to switch over to solar energy, reaching out to your local Pennsauken solar panel installation expert is an excellent place to start.