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

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

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

Solar incentives encourage people to switch their home over to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. You may be eligible for several types of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the New Jersey government and others from the federal government. Some broad categories of solar incentives include:

• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when paying property tax on your house.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are generally handled at the state level. Once your solar panel system meets the threshold (normally a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement with your River Edge utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you might get refunded a percentage of the value.
• Rebates: Solar rebates can be offered by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after you pay for a solar system and before tax credits are calculated.

Federal Solar Incentives

When you think about solar incentives, you probably think of federal incentives first. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of your solar system's cost.

The ITC can be applied to solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. This credit can be claimed on solar panels installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.

To better understand how the ITC could apply to you, reach out to your local River Edge solar panel installation expert and request more information.

The ITC was both renewed and expanded by 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 receive a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. Your local River Edge solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it applies 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. Some incentives are offered for only a limited time, while others are ongoing. Local solar incentives may come from your county or municipality, or from the New Jersey government.

Next Steps for Installing Solar in River Edge

There are a variety of solar incentives: those offered by local utility companies, those offered by the New Jersey government and those offered by the federal government, to name a few. The use of solar energy has grown enormously in the last 15 years, thanks to these incentives. It is a good idea to talk to your local River Edge solar installation expert for more information about these incentives and to ensure that you're getting the largest number possible for your solar panels.