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

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

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

The phrase "solar incentives" refers to financial incentives designed to encourage people to use renewable energy by making solar panels more affordable. Different types of incentives, like discounts, cash back or credit towards your monthly utility bill, might be available to you. Certain incentives may be offered by the New Jersey government, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if your solar system produces more than a specified (usually small) amount of electricity. These types of incentives are generally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.
• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.
• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your home.
• 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: Make sure you speak with your Wyckoff utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC allows you to claim a tax credit for a set percentage of your solar system's cost.

The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to claim the credit. Originally, the ITC covered 30% of all installation costs (panels, equipment, labor and accessories), although this amount has fluctuated slightly over the years 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 find out exactly how much the ITC could save you, talk to your local Wyckoff solar panel installation expert.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. You can now apply for a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. This new credit will then be decreased by a few percentage points every year until it expires. The 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. Your local Wyckoff solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Rebates, tax credits and more might be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones as well. Certain incentives are ongoing, while others are only available for a limited time. Solar incentives might be offered by the New Jersey government, or by your county or municipality.

Next Steps for Installing Solar in Wyckoff

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