2025 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/

The term "solar incentives" includes a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various kinds of incentives, like cash back, discounts 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 others are federal. Some broad categories of solar incentives include:

• Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when calculating property tax for your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually be deducted from your total price before any tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are usually handled at the state level. Once your solar panel system meets the threshold (usually 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 receive is usually 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 credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of the cost of your solar system.

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, equipment, accessories and labor. This credit can apply towards a solar panel system 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.

To best understand how the ITC could apply to you, speak to your local River Edge solar panel installer and ask for more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit re-raises the credit up to 30% for solar installation projects started after January 1, 2022, and completed by the end of 2032. At this point, the percentage will see a slight decrease annually until the program expires in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit might apply to you is to speak with your local River Edge solar panel company directly.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. As with federal incentives, these may include rebates, tax credits and more. Incentives may be handled by your county or municipality, or by the state of New Jersey. Some incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in River Edge

Solar incentives can be offered by your local utility company, the federal government or the New Jersey government. The large number of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. Speak with your local solar panel installation expert today to discover more about the various programs and to save as much money as possible on a solar system for your River Edge home.