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

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

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

Solar incentives are meant to help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is in place to encourage more homeowners to convert their home partially or fully to renewable energy. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are provided by the state of New Jersey or by your utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
• Rebates: Solar rebates can be offered by your local utility company, or by your county or state. These rebates work as cash back that is applied after your purchase of a solar system and before tax credits are calculated.
• Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when calculating property tax for your home.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you've signed a net metering agreement with your West Freehold utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that normally counts as part of your taxable income. In most cases, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or other performance-based incentives. Incentives like these are typically handled by your state government.

Federal Solar Incentives

Federal solar incentives are likely the first thing that comes to mind when you think about solar incentives. You've likely 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 installing solar panels.

The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost — for panels, accessories, equipment and labor — although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

Your local West Freehold solar panel installer can offer more information about the ITC and how it might apply to your situation.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. At this point, the percentage will decrease slightly each year until the end of the program in 2035. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local West Freehold solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Not all solar incentives are federal; rebates, tax credits and more might also be offered at the local or state level. Some incentives are offered for only a limited time, while others are ongoing. Your local incentives might come from the New Jersey government, or from your specific county or municipality.

Next Steps for Installing Solar in West Freehold

The variety of solar incentives available has enormously increased the nationwide adoption of solar energy over the last 15 years. You may receive solar incentives from your local utility company, the federal government or the New Jersey government. It is a good idea to talk to your local West Freehold solar installation expert to learn more about these incentives and to be sure that you're getting the largest number possible for your solar panels.