2023 Solar Incentives Guide for Totowa, NJ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Totowa.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Totowa?
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
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)
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
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
Solar incentives are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are handled by the New Jersey government or your utility company, county or municipality. Types of solar incentives might include:
- Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when paying property tax on your house.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Rebates: Solar rebates might be provided by your local utility company, or by your state or county. These rebates work as partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (normally small) amount of electricity can qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically offered by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have in place a net metering agreement with your Totowa utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you might receive a refund equivalent to a percentage of the value.
Federal Solar Incentives
When you think about solar incentives, you probably think of federal incentives first. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC can be applied to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Originally, the tax credit was for 30% of the total cost — for panels, accessories, labor and equipment — although the percentage may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
Curious how the ITC might apply to your specific situation? Contact your local Totowa solar panel installation expert to get more information.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. Now, solar installation projects that are completed between 2022 and 2032 may be eligible for a 30% tax credit. This percentage will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. Your local Totowa solar panel installer can answer your questions and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Similar to federal incentives, these could include rebates, tax credits and more. Some incentives are ongoing, while others may only be available for a limited time. These incentives may be provided by the New Jersey government, or by your county or municipality.
Next Steps for Installing Solar in Totowa
The variety of available solar incentives has contributed greatly to the increase in the adoption of solar energy nationwide over the past 15 years. You can get solar incentives from the federal government, the New Jersey government or from your local utility company. When you're prepared to make the switch to solar energy, getting in touch with your local Totowa solar panel installation expert is an excellent place to start.
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EcoWatch's Totowa, NJ Solar Incentives FAQs
What if I add a solar system to a rental property, vacation home or commercial property? Do I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many can be claimed on a second home, so long as that home is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the details.
Who installs solar panel systems near me?
To learn about the best solar panel installers near you, read our article on Totowa's best solar panel companies.
What are some environmental benefits of installing solar panels on my home?
You can lower your carbon footprint by 250 pounds of CO2 a year when you switch to solar panels. This adds up to approximately 5,000 pounds over 20 years. In addition, solar power is a renewable energy source, which means that making the switch reduces the drain on our planet's resources.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of solar panels. Depending on which incentives you are applying for, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to verify that you are claiming incentives correctly and getting the most money you can.
Can I use both solar and another type of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to go over your plan with your local Totowa solar installer. They can help you plan your project and educate you on the various incentives that you might or might 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.