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

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

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

Solar incentives are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Different types of incentives, such as discounts, cash back or monthly utility bill credits, might 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. Categories of solar incentives include:

• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
• Tax Exemptions: Your solar panels may qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your house.
• Net Metering: Don't forget to speak with your Westfield utility company about signing a net metering agreement. This will allow you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are generally handled by your state government. Once your solar panel system meets the threshold (usually a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you receive from the sale is usually considered part of your taxable income.
• Rebates: A rebate is a partial refund after the purchase of your solar panels. Rebates may be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.

Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a specified percentage of the money you spend on solar panels for your home.

The ITC is applied to the total cost of installing a solar system, including the panels themselves as well as accessories, equipment and labor. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. 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 amount you can claim.

Your local Westfield solar panel installation expert can provide you with more information about the ITC and how it might apply to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After this, the credit percentage will be reduced slightly each year until the program expires in 2035. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit might apply to you, get in touch with your local Westfield solar installation company.

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 might be available at a more local level. These solar incentives — which might be handled by the state of New Jersey, or by your county or municipality — may be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Westfield

The expanding number of available solar incentives has contributed greatly to the increase in the use of solar power nationwide over the last 15 years. You might qualify for solar incentives from your local utility company, the New Jersey government or the federal government. Reaching out to your local Westfield solar panel installation company is the best first step towards getting the most money possible when you switch to solar energy.