2024 Solar Incentives Guide for Somerville, NJ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Somerville.
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 Somerville?
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/
The term "solar incentives" refers to 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. Different types of incentives, including discounts, cash back or credit towards your monthly utility bill, may be available to you. Certain incentives may be offered by the New Jersey government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
- Net Metering: You can sign a net metering agreement with your Somerville utility company that will apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your monthly utility bill.
- Tax Exemptions: Your solar system could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when calculating property taxes on your house.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or similar performance-based incentives. These kinds of incentives are normally handled by your state government.
- Rebates: A solar rebate is a partial refund after the purchase of your solar panels. These could be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
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 might be the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of the cost of your solar system.
The ITC can be applied to solar systems installed after January 1, 2006, on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost – for panels, accessories, equipment and labor – although the percentage may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
To know exactly how much the ITC could save you, talk to your local Somerville solar panel installation expert.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit extends until 2035. Homeowners can now receive a 30% credit for solar systems installed between January 1, 2022, and December 31, 2032. The credit will then decrease annually until its expiration. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit will apply to you, get in touch with your local Somerville solar installers.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Like with federal incentives, these can include rebates, tax credits and more. Certain incentives are ongoing, while others are offered for only a limited time. Your local incentives may come from the New Jersey government, or from your specific county or municipality.
Next Steps for Installing Solar in Somerville
Nationwide solar energy use has gone up tremendously in the past 15 years, in part thanks to the increase in availability of solar incentives. You can obtain these incentives from your local utility company, the New Jersey government or the federal government. We recommend talking to your local Somerville solar installation company to learn more about these incentives and to make sure that you're getting the largest number possible for your solar panels.
EcoWatch's Somerville, NJ Solar Incentives FAQs
How much will a solar system save me on my electric bill in Somerville annually?
After adding solar panels to your house in Somerville, you can anticipate savings of about $718.71 per year, or about $13,655.49 over 20 years.
Who installs solar panel systems near me?
To learn about the best solar panel installation companies near you, read our article on the best solar companies in Somerville.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly 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 change out my appliances for ones that are more energy-efficient. Are there any credits I can get?
The new Inflation Reduction Act provides multiple incentives designed to reward homeowners who make eco-friendly upgrades. Some incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
What if I am planning to add solar panels to a rental property, vacation home or commercial property? Can I still qualify for incentives?
While we recommend getting in touch with your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many incentives can be claimed on a second home, provided that it is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the specifics.
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.