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

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

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

The phrase "solar incentives" broadly refers to financial incentives that are in place to encourage people to use renewable energy by making solar panels more affordable. Various kinds of incentives, such as discounts, cash back or monthly utility bill credits, may be available to you. Certain incentives may be provided via the state of New Jersey, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled at the state level. Once your solar panel system meets a predetermined threshold (generally 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 from the sale is usually considered part of your taxable income.
• Rebates: Solar rebates may be offered by your local utility company, or by your county or state. These rebates work as cash back that is applied after your purchase of solar panels and before tax credits are calculated.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
• Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when you are calculating property taxes on your home.
• Net Metering: Net metering factors in after your solar system is up and running. If you've signed a net metering agreement with your South Brunswick utility company, the company 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 areas you may receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

When people think of solar incentives, federal incentives may be the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a certain percentage of the money you spend on solar panels for your home.

The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Initially, the ITC applied to 30% of all system costs (panels, labor, equipment and accessories), 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 claim amount.

To better understand exactly how much the ITC could save you, contact your local South Brunswick solar panel installer.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; this amount will decrease slightly on a yearly basis until the current program ends. Starting in 2023, it will also be easier to obtain credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit applies to you is to talk with your local South Brunswick solar panel company.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. As with federal incentives, these can include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. Local solar incentives might come from your county or municipality, or from the New Jersey government.

Next Steps for Installing Solar in South Brunswick

The nationwide use of solar energy has gone up tremendously in the past 15 years, in part due to the growth in the number of solar incentives. You might receive these incentives from your local utility company, the New Jersey government or the federal government. Your local South Brunswick solar panel installer can provide you with more details about which incentives you should apply for, and get you started on the path to switching to renewable energy today.