2023 Solar Incentives Guide for Summit, NJ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Summit.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Summit?
Solar Energy Sales Tax Exemption
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/
Solar incentives help mitigate the cost of installing solar panels on your home. Financial incentives like these are in place to encourage more people to switch their home over to renewable energy. Solar incentives could include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of New Jersey and some by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Your solar panel system might qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when you are calculating property taxes on your house.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if you have a solar system that produces over a specified (typically small) amount of electricity. This category of incentives is normally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.
- Net Metering: Don't forget to speak to your Summit utility company about signing a net metering agreement. This will allow you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from the total price before tax credits are calculated.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
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Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC offers a tax credit for a set percentage of your solar system's cost.
The ITC is applied to the total cost of solar panel installation, including the panels themselves as well as labor, equipment and accessories. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.
Your local Summit solar panel installation expert can provide more information about the ITC and how it may apply to your situation.
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. You are now eligible for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. The credit will then decrease annually until the date of expiration. Starting in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit applies to you, get in touch with your local Summit solar installers.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these may include tax credits, rebates and more. Some incentives are ongoing, while others are offered for only a limited time. Local solar incentives might come from the New Jersey government, or from your specific county or municipality.
Next Steps for Installing Solar in Summit
There are a number of different solar incentives: those given by local utility companies, those given by the New Jersey government and those given by the federal government, to name a few. The use of solar energy has grown enormously in the last 15 years, thanks to these incentives. Your local Summit solar panel installation company can give you more information about which incentives you can apply for, and get you started on the path to switching to renewable energy today.
EcoWatch's Summit, NJ Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
Many solar incentives apply to a property located within the United States that you own, and most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend reaching out to your local solar installer and/or tax professional to better understand what incentives may apply to your specific situation.
How much can I save annually on my electric bill if I add solar panels to my Summit home?
When you add solar panels to your home in Summit, you can expect to save about $729.49 per year, or about $13,860.23 over 20 years.
What are the best solar panel installation companies near me?
To find the top solar panel installers near you, read our article on Summit's top solar panel companies.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any incentives I can apply for?
The new Inflation Reduction Act creates several new financial incentives to encourage you to make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use a combination of solar and another type of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home, such as a combination of geothermal and solar. You can also combine renewable energy generation with a non-renewable backup source of energy. Be sure to discuss your plan with your local Summit solar installation expert, so that you understand what you'll need and what types of incentives you may or may not qualify for.
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.