2023 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/

The term "solar incentives" covers a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Solar incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the state of New Jersey and some by your specific utility company, county or municipality. Categories of solar incentives include:

• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have in place a net metering agreement with your Pequannock 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 locations, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
• Tax Exemptions: These may come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when calculating the taxes you pay on your home. You could also look for exemptions on sales tax at the time of purchase.
• Rebates: Solar rebates can be provided by your county or state, or by your local utility company. These rebates are essentially partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled at the state level. Once your solar panel system meets a predetermined threshold (usually a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you make is usually considered part of your taxable income.

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.

The ITC originally covered 30% of the cost of installing a solar system, although that number has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of labor, accessories and equipment. 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 better understand how the ITC might apply to your situation, speak to your local Pequannock solar panel installer and ask for more information.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can apply for a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. The easiest way to fully understand how the new Clean Energy Credit will apply to you is to speak with your local Pequannock solar panel installation expert directly.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these might include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. Your local incentives could come from your county or municipality, or from the New Jersey government.

Next Steps for Installing Solar in Pequannock

The nationwide use of solar energy has gone up tremendously in the past 15 years, in part due to the proliferation of solar incentives. You may get these incentives from the federal government, the New Jersey government or your local utility company. When you're ready to switch over to solar energy, getting in touch with your local Pequannock solar panel installation expert is a great first step.