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

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

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

The phrase "solar incentives" refers to financial incentives designed to encourage the use of renewable energy by making the installation and use of solar panels more affordable. The incentives may include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the New Jersey government and some by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Net Metering: Make sure you speak with your Upper Montclair utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if you have a solar system that produces over a specified (generally small) amount of electricity. Performance-based incentives are generally handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is normally considered part of your taxable income.
• Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when paying property tax on your home.
• Rebates: A solar rebate is a partial refund after the purchase of your solar panels. These could be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
• Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the federal government. Tax credits differ from tax deductions.

Federal Solar Incentives

Federal solar incentives are probably the first thing that you think of when you think about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a certain percentage of the money you spend on solar panels for your home.

The ITC is applied to the total cost of installing a solar system, including the panels themselves as well as equipment, accessories and labor. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.

Speaking with your local Upper Montclair solar panel installer is the best way to learn more about how the ITC applies to your situation.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Under the new program, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 might qualify for a 30% tax credit. This credit amount will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. Your local Upper Montclair solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more can be offered at a more local level. Some incentives are ongoing, while others are offered for only a limited time. Your local incentives might come from the New Jersey government, or from your specific county or municipality.

Next Steps for Installing Solar in Upper Montclair

You can apply for solar incentives from the New Jersey government and the federal government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Talking to your local Upper Montclair solar panel installation company is a great first step towards getting all the incentives you qualify for when you switch to solar energy.