2025 Solar Incentives Guide for Washington, NJ - Tax Credits & Rebates

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

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

Solar incentives are designed to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Different kinds of incentives, like discounts, cash back or monthly utility bill credits, might be available to you. Some incentives may be offered by the state of New Jersey, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:

• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. These might be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
• Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your house.
• Net Metering: You can sign a net metering agreement with your Washington utility company that will apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your utility bill each month.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (generally small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically given by your state government. SRECs can be sold to your utility company or another buyer, and this is usually considered part of your taxable income.

Federal Solar Incentives

When you think about solar incentives, you probably think of federal incentives first. A federal incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of your solar system's cost.

The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006, on a property you own for you to be eligible for the credit. The ITC initially covered 30% of all system installation costs (panels, accessories, labor and equipment), although this amount has fluctuated over the years 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.

To know exactly how much money the ITC could save you, speak with your local Washington solar panel installation expert.

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. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; the amount will then decrease slightly each year until the current program ends. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit will apply to you, speak with your local Washington solar installation expert.

State & Local Solar Incentives

Tax credits, rebates and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others are available for a limited time. They may be offered by your county or municipality, or by the New Jersey government.

Next Steps for Installing Solar in Washington

There are a number of different solar incentives: those given by local utility companies, those provided by the New Jersey government and those offered by the federal government, to name a few. The use of solar energy has grown tremendously in the last 15 years, thanks to these incentives. We recommend talking to your local Washington solar installation company to learn more about these incentives and to ensure that you're getting all the money you can for your solar panels.