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

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

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

The term "solar incentives" refers to a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may be eligible for various kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the New Jersey government and others from the federal government. You might qualify for any of the following types of solar incentives:

• Rebates: Rebates, or partial refunds after a purchase, are usually given before any solar tax credits are calculated. Solar rebates can be provided by your local utility company, by your state or by your county.
• Tax Exemptions: Your solar panels may qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when you are calculating property taxes on your house.
• Net Metering: You can sign a net metering contract with your Union utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your utility bill each month.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled at the state level. Once your solar panel system meets the threshold (usually a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you receive from the sale is generally considered part of your taxable income.

Federal Solar Incentives

When you think about solar incentives, you probably think of federal incentives first. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of the cost of your solar system.

The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006 on a property owned by you for you to claim the credit. Initially, the ITC applied to 30% of all installation costs (panels, equipment, accessories and labor), although the covered amount has fluctuated over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.

Your local Union solar panel installer can give you more information about the ITC and how it applies to your situation.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. The amount will then decrease slightly each year until the end of the current program. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit will apply to you, speak with your local Union solar installers.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. Similar to federal incentives, these could include tax credits, rebates and more. These incentives may be provided by the New Jersey government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Union

You can apply for and receive solar incentives from the New Jersey government and the federal government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. It is a good idea to talk to your local Union solar installer for more information about these incentives and to make sure that you're getting the most money possible for your solar system.