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

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

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

The term "solar incentives" includes a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. These incentives may include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of New Jersey and some by your utility company, county or municipality. Some broad 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 federal government.
• Tax Exemptions: Your solar panel system might qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your home.
• Rebates: Solar rebates can be offered by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after you purchase solar panels and before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce more than a specified (generally small) amount of electricity can qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically offered at the state level. SRECs can be sold to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
• Net Metering: You can sign a net metering contract with your Woodbridge utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your monthly utility bill.

Federal Solar Incentives

Federal solar incentives are likely 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. This incentive is a tax credit equal to a predetermined percentage of the money you spend on your solar system.

The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006 on a property owned by you for you to be eligible for the credit. The ITC originally paid out 30% of all costs (panels, equipment, labor and accessories), although this amount has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

To better understand how the ITC might apply to you, get in touch with your local Woodbridge solar panel installation expert and request more information.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now referred to as 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. After 2032, the percentage will see a slight decrease annually until the program expires in 2035. The program expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit will apply to you is to talk with your local Woodbridge solar panel installation expert.

State & Local Solar Incentives

Not all solar incentives are federal; tax credits, rebates and more are often offered at the local or state level. These incentives may be given out by your county or municipality, or by the New Jersey government. Some incentives may be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Woodbridge

Solar energy use nationwide has significantly increased in the last 15 years, in part thanks to the growth in the number of solar incentives. You can obtain these incentives from the New Jersey government, the federal government or your local utility company. Reaching out to your local Woodbridge solar panel installation expert is a great first step towards getting all the incentives you qualify for when you switch to solar energy.