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

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

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

Solar incentives are meant to encourage people to make the switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Various types of incentives, such as cash back, discounts or monthly utility bill credits, may be available to you. Certain incentives may be provided via the state of New Jersey, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:

• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system can earn SRECs or other performance-based incentives. These kinds of incentives are generally handled by your state government.
• Rebates: Solar rebates can be provided by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after you pay for a solar system and before tax credits are calculated.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your West New York utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you might be refunded a percentage of the value.
• Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. These differ from tax deductions.
• Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to ignore the value added by your solar panels when paying taxes on your house. You may also qualify for an exemption on sales tax at the time of purchase.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a certain percentage of the money you spend on your solar system.

The ITC is applied to the total cost of solar system installation, 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 located in the United States that you own. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.

Your local West New York solar panel installation expert can provide you with more information about the ITC and how it applies to your situation.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. Homeowners can now receive a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. The credit will then decrease annually until the date of expiration. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local West New York solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more may be available at a more local level. Certain incentives are ongoing, while others may only be available for a limited time. These incentives might be offered by the New Jersey government, or by your county or municipality.

Next Steps for Installing Solar in West New York

There are a variety of solar incentives: those offered by the federal government, those offered by the New Jersey government and those offered by local utility companies, to name a few. The use of solar energy has increased enormously in the last 15 years, thanks to these incentives. Reaching out to your local West New York solar panel installation company is the best first step towards getting the most money possible when you switch to solar energy.