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

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

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

Solar incentives mitigate the cost of installing a solar panel system on your home. These financial incentives are intended to encourage more people to make the switch to renewable energy. Different types of incentives, including discounts, cash back or monthly utility bill credits, may be available to you. Certain incentives may be offered by the state of New Jersey, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:

• Rebates: Solar rebates can be provided by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after you pay for solar panels and before tax credits are calculated.
• Tax Exemptions: Your solar panels might qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when calculating property taxes on your house.
• Net Metering: You may be able to sign a net metering contract with your South Plainfield utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your monthly utility bill.
• 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.)
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or other performance-based incentives. Incentives like these are generally handled by your state government.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a specified percentage of the money you spend on solar panels for your home.

The ITC can be applied to solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. This credit can apply towards a solar panel system installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.

Speaking with your local South Plainfield solar panel installation expert is the best way to learn more about how the ITC applies to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. The Clean Energy Credit runs until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. The amount will then decrease slightly on a yearly basis until the current program ends. The program expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. The easiest way to learn more about how the new Clean Energy Credit applies to you is to get in touch with your local South Plainfield solar panel installation expert.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more may be available at a more local level. Incentives might be provided by the state of New Jersey, or by your county or municipality. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in South Plainfield

There are a number of different solar incentives: those provided by local utility companies, those provided by the New Jersey government and those provided by the federal government, to name a few. The use of solar energy has increased enormously in the last 15 years, partially due to these incentives. We suggest talking to your local South Plainfield solar installer for more information about these incentives and to ensure that you're getting the largest number possible for your solar system.