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

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

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

The term "solar incentives" refers to a wide 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. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are handled by the New Jersey government or your specific utility company, county or municipality. Types of solar incentives might include:

• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (normally small) amount of electricity can qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically provided at the state level. 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: Be sure to speak to your Princeton utility company about signing a net metering agreement. This will allow you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. These may be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
• Tax Exemptions: These may come in the form of property tax exemptions, which can let you ignore 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.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. One of the incentives many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a certain percentage of your solar system's cost.

The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, equipment, accessories and labor — although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the claim amount.

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

The ITC was renewed and increased in scope after 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 then decrease slightly on a yearly basis until the end of the current program. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. Your local Princeton solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more may be available at a more local level. Incentives might be handled by your county or municipality, or by the state of New Jersey. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Princeton

The large number of available solar incentives has enormously increased the nationwide adoption of solar energy over the last 15 years. You may receive solar incentives from the New Jersey government, the federal government or your local utility company. Your local Princeton solar panel installation expert can help you learn more about which incentives you should apply for, and get you started on the path to switching to renewable energy today.