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

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

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

The term "solar incentives" refers to financial incentives designed to encourage the use of renewable energy by making the installation and use of solar panels more affordable. You might qualify for several types of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of New Jersey and others from the federal government. Some broad categories of solar incentives include:

• Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Raritan utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other areas you might make back a percentage of the value.
• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Tax Exemptions: These can come in the form of property tax exemptions, which can let you ignore the value of your solar system when paying taxes on your home. They may also include exemptions on sales tax at the time of purchase.
• Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. Rebates might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are usually handled by your state government. Once your solar panel system meets the qualification threshold (generally a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you make is generally 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. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a specified percentage of the money you spend on solar panels for your home.

The ITC can be applied to solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. This credit can be claimed on solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.

Have questions about how the ITC applies to your specific situation? Contact your local Raritan solar panel installer to get more information.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. At this point, the percentage will decrease slightly each year until the end of the program 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. The easiest way to learn more about how the new Clean Energy Credit applies to you is to get in touch with your local Raritan solar panel installers.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Raritan

There are a number of different solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the New Jersey government, to name a few. Solar energy utilization has increased tremendously in the last 15 years, partially due to these incentives. When you're prepared to make the change to solar energy, reaching out to your local Raritan solar panel installation expert is a great first step.