2024 Solar Incentives Guide for Somerset, NJ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Somerset.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Somerset?
Successor Solar Incentive (SuSI) Program
Small Net-Metered Non-Residential located on Rooftop, Carport, Canopy and Floating Solar
Projects smaller than 1 MW (dc): $100/SREC-II, $120 for public entities
Projects 1 MW to 5 MW (dc): $90/SREC-II, $110 for public entities
Net Metered Non-Residential Ground Mount
Projects smaller than 1 MW (dc): $85/SREC-II, $105 for public entities
Projects 1 MW to 5 MW (dc): $80/SREC-II, $100 for public entities
Community Solar LMI: $90/SREC-II
Community Solar Non-LMI: $70/SREC-II
Property Tax Exemption for Renewable Energy Systems
Solar Renewable Energy Certificates (SRECs) Registration Program
In June 2016, SREC traded at an average price of $229.90.
PSE&G - Solar Loan Program
NJ Clean Energy- Residential New Construction Program
Single family homes: Ranges from $1,125 to - 24,250
Multi-single homes: Ranges from $1,125 to $18,188
Multifamily homes: Ranges from $625-$12,125
Home Performance with ENERGY STAR Program
Single family : $2,000 to $4,000
Multi-family : $500-$1,500 per unit
Rebates for single family and multi-family should not exceed 50% of the cost of the measures used to calculate total estimated savings (TES)
See table below for details
Loans
Single-family: $5,000 (Tier II) or $10,000 (Tier III)4.99% interest loans up to $15,000 (where utility 0% financing is unavailable)
COOLAdvantage Program
Ductless Mini Split A/C or Heat Pump: $500
Air Source Heat Pump: $300 (Tier 1), $500(Tier 2)
Geothermal Heat Pump: $500
NJ Clean Energy- WARMAdvantage Program (Electric and Gas)
Solar Hot Water Heater: $1,200
Heat Pump Water Heater: $500
Geothermal Heat Pump: $500
Air-Source or Ductless Mini-Split Heat Pump: $300- $500
Residential Gas Customers (including propane):
Gas Furnace: $250- $500
Gas Boiler: $300
Gas Water Heater: $300
Solar Hot Water Heater: $1,200
Oil Heating Customers:
Oil Furnace: $250
Oil Boiler: $300
Combination Rebate
Boiler and Water Heater Combination Rebate: $700
Furnace and Water Heater Combination Rebate: $700- $950
New Jersey Renewable Energy Incentive Program (Sustainable Biopower)
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are provided by the federal government, while others are offered by the state of New Jersey or by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a predetermined (generally small) amount of electricity qualify for SRECs or other similar performance-based incentives. SRECs and performance-based incentives in general are typically provided at the state level. You can sell SRECs to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions let you ignore the value added by your solar system when calculating the amount of property tax you need to pay on your home.
- Rebates: A solar rebate is a partial refund given after you've purchased your solar system. These may 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 tax credits are calculated.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Somerset utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other areas you might be refunded a percentage of the value.
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of your solar system's cost.
The ITC applies to the value of a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006, for you to claim the credit. The ITC initially covered 30% of all installation costs (panels, accessories, equipment and labor), although the covered amount has fluctuated slightly over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
Your local Somerset solar panel installation expert can provide more information about the ITC and how it might apply to your situation.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). With the new provisions, solar installation projects started after January 1, 2022, and completed by the end of 2032, might qualify for a 30% tax credit. This percentage will then decrease slightly each year until the current Clean Energy Credit expires in 2035. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Somerset solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Rebates, tax credits and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Certain incentives are offered for only a limited time, while others are ongoing. Your local solar incentives could come from the New Jersey government, or from your specific county or municipality.
Next Steps for Installing Solar in Somerset
There are many types of solar incentives: those provided by the federal government, those offered by the New Jersey government and those offered by local utility companies, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially thanks to these incentives. We recommend talking to your local Somerset solar installation expert for more information about these incentives and to make sure that you're getting all the money you can for your solar panels.
EcoWatch's Somerset, NJ Solar Incentives FAQs
I already have solar panels installed. Are there any incentives that I qualify for?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the exact installation date. Talking to the company that installed your solar system, or any local Somerset solar installer, can help you understand what incentives you might want to apply for.
What are some environmental benefits of installing solar panels on my house?
Solar energy is renewable — by changing where you get your energy, you help lessen the strain on our planet's resources. Solar panels can also reduce your home's CO2 emissions by 300 pounds annually, or roughly 5,000 pounds in 20 years.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is set to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any benefits I can get?
Under the new Inflation Reduction Act, there are a number of new financial incentives to encourage you to make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.