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

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

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

Solar incentives help mitigate the cost of installing a solar panel system on your home. These financial incentives are designed to encourage more homeowners to convert their home partially or fully to renewable energy. The incentives could include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the state of New Jersey and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. Tax credits are different from tax deductions.
• Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. Rebates might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if you have a solar system that produces more than a specified (typically small) amount of electricity. This category of incentives is generally handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you receive in return is normally considered part of your taxable income.
• Net Metering: You can sign a net metering agreement with your Vernon utility company that will apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your monthly utility bill.
• Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions let you exclude the value that your solar panels add when you calculate the amount of property tax you need to pay.

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC provides you with a tax credit for a specific percentage of your solar system's cost.

The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. This credit can apply towards solar panels installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

Your local Vernon 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. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, talk to your local Vernon solar installers.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. Like with federal incentives, these could include tax credits, rebates and more. Certain incentives are ongoing, while others are offered for only a limited time. These local incentives may come from your county or municipality, or from the New Jersey government.

Next Steps for Installing Solar in Vernon

There are a variety of solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the New Jersey government, to name a few. Solar energy utilization has grown enormously in the last 15 years, partially due to these incentives. If you're prepared to make the change to solar energy, reaching out to your local Vernon solar panel installation expert is a great first step.