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

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

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

Solar incentives are intended to encourage homeowners to switch to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are offered by the state of New Jersey or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Rebates: Solar rebates can be provided by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
• Net Metering: Be sure to speak with your Woolwich utility company about signing a net metering agreement. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when calculating property tax for your house.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (normally small) amount of electricity will qualify for SRECs or similar performance-based incentives. SRECs and the like are typically provided at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some knowledge of. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of the cost of your solar system.

The ITC initially applied to 30% of the cost of solar panel installation, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

To best understand how the ITC will apply to your situation, speak to your local Woolwich solar panel installer and ask for more information.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners may be eligible for a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit applies to you is to speak with your local Woolwich solar panel company directly.

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 may be available at a more local level. Some incentives are ongoing, while others are offered for only a limited time. These local incentives could come from the New Jersey government, or from your specific county or municipality.

Next Steps for Installing Solar in Woolwich

You can receive solar incentives from the federal government and the New Jersey government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. It is a good idea to talk to your local Woolwich solar installer to learn more about these incentives and to be sure that you're getting the largest number possible for your solar system.