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

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

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

Solar incentives are designed to encourage people to switch their home over to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are offered by the New Jersey government or by your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• 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.)
• Net Metering: You can sign a net metering agreement with your Sparta utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your utility bill each month.
• Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce more than a predetermined (generally small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically offered by your state government. SRECs can be sold to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually come off your total price before tax credits are calculated.
• Tax Exemptions: Your solar system 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 added value of the solar panels when calculating property taxes on your home.

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. One of the incentives that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of the cost of your solar system.

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 after January 1, 2006 on a property you own for you to be eligible for the credit. Initially, the ITC applied to 30% of all costs (panels, accessories, equipment and labor), although this amount has fluctuated slightly over time 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 Sparta solar panel installer can provide more information about the ITC and how it applies to your situation.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). Now, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 might qualify for a 30% tax credit. This percentage will then see a slight annual decrease until the end of the current Clean Energy Credit 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 Sparta 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

There are more than just federal solar incentives; rebates, tax credits and more might also be offered at the state and local level. Certain incentives are ongoing, while others might only be available for a limited time. They may be offered by your county or municipality, or by the New Jersey government.

Next Steps for Installing Solar in Sparta

Solar incentives might come from the New Jersey government, the federal government or your local utility company. The large number of available incentives has contributed to a large increase in solar energy use in the last 15 years. When you're ready to make the change to solar energy, getting in touch with your local Sparta solar panel installation expert is an excellent place to start.