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

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

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

Solar incentives encourage people to switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Different types of incentives, such as discounts, cash back or credit towards your monthly utility bill, may be available to you. Certain incentives may be handled by the New Jersey government, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a predetermined (generally small) amount of electricity can qualify for SRECs or other performance-based incentives. SRECs and the like are typically given at the state level. SRECs can be sold to your utility company or another buyer, and this is usually considered part of your taxable income.
• Tax Exemptions: These might come in the form of property tax exemptions, which let you ignore the value of your solar system when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
• Rebates: Rebates, or partial refunds after a purchase, are normally given prior to any solar tax credits being calculated. These rebates might be offered by your local utility company, by your state or by your county.
• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
• Net Metering: Be sure to speak to your Plainfield utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC offers a tax credit for a specific percentage of the cost of your solar system.

The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. Initially, the ITC applied to 30% of all system installation costs (panels, accessories, equipment and labor), although this amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

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

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). With the new provisions, solar installation projects started after January 1, 2022 and completed by the end of 2032 might qualify for a 30% tax credit. This credit amount will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.

More information about the new Inflation Reduction Act can be found here. Your local Plainfield solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more may be available at a more local level. Certain incentives are offered for only a limited time, while others are ongoing. Your local incentives might come from the New Jersey government, or from your specific county or municipality.

Next Steps for Installing Solar in Plainfield

Solar incentives may be offered by the New Jersey government, the federal government or your local utility company. The large number of available incentives has contributed to a large increase in solar energy use in the last 15 years. We suggest talking to your local Plainfield solar installer for more information about these incentives and to make sure that you're getting all of the money you can for your solar panels.