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

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

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

Solar incentives encourage homeowners to make the switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are provided by the New Jersey government or by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Net Metering: Make sure you speak with your Pequannock utility company about signing a net metering agreement. This will allow you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
• Rebates: Rebates, or cash back after a purchase, are normally given prior to any solar tax credits being calculated. Rebates may be given by your local utility company, by your county or by your state.
• Tax Exemptions: These can come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when paying property tax on your home. You could also look for exemptions on sales tax at the time of purchase.
• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if you have a solar system that produces more than a specified (usually small) amount of electricity. This category of incentives is usually handled at the state level. You can sell SRECs to your utility company or other buyers, and the money you receive in return is normally considered part of your taxable income.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a specified percentage of the money you spend installing solar panels.

The ITC was originally for 30% of the cost of solar system installation, although that number has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum claim amount. The ITC can be applied 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.

Your local Pequannock solar panel installer can give you more information about the ITC and how it may apply to your situation.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. The new Clean Energy Credit now runs until 2035. American homeowners can now receive a 30% credit for solar systems that began installation on or after January 1, 2022, and will be done by December 31, 2032. The total credit will then see a slight annual decrease until its expiration. Beginning in 2023, it will also be easier to claim credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. Your local Pequannock solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. Similar to federal incentives, these could include rebates, tax credits and more. These incentives may 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 Pequannock

There are a number of different solar incentives: those offered by local utility companies, those given by the New Jersey government and those offered by the federal government, to name a few. Solar energy use has grown tremendously in the last 15 years, partially due to these incentives. Call your local solar panel installer today to find out more information and to save as much money as possible on a solar system for your Pequannock home.