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

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

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

Solar incentives encourage people to make the switch to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. These incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the New Jersey government and some by your specific utility company, county or municipality. Categories of solar incentives include:

• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your home.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. These rebates may be offered by your local utility company, by your state or by your county.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are usually handled at the state level. Once your solar system meets a certain threshold (typically 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 make from the sale is generally considered part of your taxable income.
• Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your South Orange Village utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other areas you may be refunded a percentage of the value.

Federal Solar Incentives

Federal solar incentives are probably the first thing that you think of when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC offers a tax credit for a set percentage of your solar system's cost.

The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can be claimed on solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.

To better understand how the ITC will apply to your situation, contact your local South Orange Village solar panel installation expert and request more information.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. Homeowners can now receive a credit equal to 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. Your local South Orange Village solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the state and local level. Certain incentives are ongoing, while others are only available for a limited time. They might be offered by the New Jersey government, or by your county or municipality.

Next Steps for Installing Solar in South Orange Village

You can receive solar incentives from the New Jersey government and the federal government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. Your local South Orange Village solar panel installation company can provide you with more details about which incentives you might qualify for, and get you started on the path to switching to renewable energy today.