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

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

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

Solar incentives are designed to encourage homeowners to make the switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Different kinds of incentives, like discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be provided via the state of New Jersey, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:

• Net Metering: You may be able to sign a net metering agreement with your Wood Ridge utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your utility bill each month.
• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually be deducted from your total price before any tax credits are calculated.
• Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the added value of the solar panels when calculating property taxes on your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce more than a predetermined (generally small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and the like are typically offered by your state government. You can sell SRECs to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.

Federal Solar Incentives

Federal solar incentives are probably the first thing that you think of when thinking about solar incentives. You might have 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 covers solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can claim this credit for a solar panel system installed on a primary or secondary residence that you own in the United States. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.

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

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. With the new provisions, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 might qualify for a 30% tax credit. The amount of the credit will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit will apply to you, talk to your local Wood Ridge solar installers.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more might be available at a more local level. Incentives may be handled by your county or municipality, or by the state of New Jersey. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Wood Ridge

There are many types of solar incentives: those given by local utility companies, those given by the federal government and those given by the New Jersey government, to name a few. Solar energy use has grown tremendously in the last 15 years, partially thanks to these incentives. Speaking with your local Wood Ridge solar panel installer is a great first step towards making sure you get all the incentives you qualify for when you switch to solar energy.