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

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

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

The phrase "solar incentives" refers broadly to financial incentives put in place by solar companies and the government to encourage the use of renewable energy by making installing and using solar panels more affordable. You might qualify for various kinds of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the New Jersey government and others from the federal government. You might qualify for any of the following types of solar incentives:

• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually come off your total price before any tax credits are calculated.
• 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 (generally small) amount of electricity. These types of incentives are normally handled at the state level. You can sell SRECs to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
• Net Metering: Make sure you talk to your West Orange utility company about signing a net metering agreement. This allows you to receive credit towards your utility bill every month for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: Your solar system might qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your home.

Federal Solar Incentives

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

The ITC applies to the total cost of installing a solar system, including the panels themselves as well as accessories, labor and equipment. 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. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.

To know exactly how much the ITC could save you, get in touch with your local West Orange solar panel installer.

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. Homeowners are now eligible for 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 program expansion 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. Your local West Orange solar panel installer can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in West Orange

Solar energy use nationwide has increased enormously in the last 15 years, in part due to the growth in the number of solar incentives. You can obtain these incentives from your local utility company, the federal government or the New Jersey government. Getting in touch with your local West Orange solar panel installation company is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.