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

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

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

Solar incentives are designed to encourage people to make the switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are handled by the New Jersey government or by your specific utility company, county or municipality. Categories of solar incentives include:

• Net Metering: Be sure to speak with your Sayreville utility company about signing a net metering agreement. This allows you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: These can come in the form of property tax exemptions, which allow you to ignore the value added by your solar panels when paying property tax on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the federal government. These are different from tax deductions.
• Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from your total price before any tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if you have a solar system that produces more than a specified (typically small) amount of electricity. These types of incentives are generally handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.

Federal Solar Incentives

Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. A federal incentive many people are likely 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 is applied to the total cost of installing a solar system, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.

Your local Sayreville solar panel installer can provide more information about the ITC and how it might apply to your situation.

In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit ends in 2035. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

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

State & Local Solar Incentives

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

Next Steps for Installing Solar in Sayreville

There are many types 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. Solar energy use has grown enormously in the last 15 years, partially due to these incentives. It is a good idea to talk to your local Sayreville solar installer for more information about these incentives and to ensure that you're getting all of the money you can for your solar panels.