New Jersey has long been a leading state for solar energy adoption thanks to ample sunshine, high energy prices, and strong policy incentives. What are the solar incentives for 2023 in NJ? If you’re a New Jersey home or business owner looking to go solar in 2023, there are a few key NJ free solar program and incentives to be aware of that can help make solar more affordable.
New Jersey Solar Renewable Energy Certificates (SRECs)
If you’re wondering, will there be solar credits in 2023 and solar incentives for 2023, it is pivotal to highlight the role of the Solar Renewable Energy Certificates (SRECs) in this landscape. This program has facilitated a surge in solar energy adoption and economically rewarded solar system owners.
- New Jersey’s Solar Renewable Energy Certificate (SREC) program has driven tremendous growth in solar over the past decade. SRECs are credits that solar system owners earn for every 1,000 kWh of electricity their system generates.
- Utilities then purchase these SRECs to comply with the state’s renewable portfolio standard.
- In 2023, New Jersey utilities will be required to source at least 5.8% of their electricity from solar, creating a strong demand for SRECs.
- While SREC prices fluctuate with market supply and demand, a typical 5 kW home solar system earns $300-$500 in SRECs annually.
Federal Solar Tax Credit
Along with the consideration of financial incentives available for New Jersey solar programs 2023, it is essential to note the significant impact of the federal solar tax credit. This initiative, available nationwide, offers substantial savings, making the transition to solar energy more affordable for many homeowners.
- The federal solar tax credit allows homeowners to deduct 26% of their solar installation costs from their federal taxes in 2023. This credit will step down to 22% in 2024 before expiring entirely in 2025.
- There is no cap on the amount that can be claimed, and the credit can be carried forward if it exceeds your tax liability in a given year.
- This incentive, combined with SRECs, can cover 50-60% of the costs of going solar for a typical homeowner.
As we continue to navigate the landscape of New Jersey solar programs in 2023, it is crucial to understand the benefits brought by the net metering policy. This policy is a testament to New Jersey’s commitment to encouraging renewable energy adoption, offering substantial savings to solar customers.
- New Jersey has mandatory statewide net metering rules in place for solar customers.
- This means that if your solar system generates more electricity than your home or business uses, that excess energy gets exported to the grid, and your utility will credit you at the full retail electric rate.
- At the end of each billing cycle, you only pay for your net electricity usage minus your solar generation.
- Net metering gives homeowners full credit for their solar production and maximizes their savings.
Key Steps to Claim NJ Solar Incentives
Embarking on a solar installation journey and New Jersey solar programs 2023 is a decision accompanied by a series of beneficial incentives. However, to fully reap the benefits, it is essential to be aware of the necessary steps to claim these incentives. Here we outline a detailed guide to help you navigate this process seamlessly:
1. Apply for a NJ Clean Energy Program Rebate
- Before Starting Construction: Ensure to apply for a rebate through the NJ Clean Energy Program before initiating the construction phase of your solar project.
- Rebate Coverage: The rebates available typically cover between 10-20% of the project costs, significantly reducing your initial investment.
2. Register Your Solar System in New Jersey’s SREC Registration Program
- Post-Project Completion: Once your solar project is complete, the next step is to register your solar system in New Jersey’s SREC Registration Program.
- Selling Your SRECs: Registration in the program allows you to sell your SRECs, providing an avenue for financial returns on your investment.
3. File for the Federal Solar Tax Credit
- After System Installation: Following the installation of your solar system, be prepared to file for the federal solar tax credit in your subsequent tax return.
- Tax Credit Benefits: This step enables you to deduct a significant portion of your solar installation costs from your federal taxes, enhancing your savings substantially.
4. Sign Up for Net Metering with Your Utility
- Receiving Credit for Excess Solar Generation: Signing up for net metering with your utility company is the final step in this process. This setup ensures that you receive credit for the excess solar energy generated by your system.
- Maximizing Savings: Net metering not only facilitates credit for your solar production but also maximizes your savings by offsetting your electricity bills with the energy you generate.
By meticulously following these steps, you position yourself to take full advantage of the New Jersey solar programs 2023 and incentives available, paving the way for a sustainable and economically beneficial solar installation.
Outlook for 2023 and Beyond
While solar incentives are phasing down with upcoming expirations of the federal tax credit and New Jersey’s current SREC program in 2025-2026, solar is still expected to remain a strong investment in the state. Policymakers continue to discuss options to extend SRECs or transition to a new incentive program to maintain New Jersey’s solar growth and climate goals. Rising retail electricity rates will also further improve solar savings over time. Reaching out to a reputable solar provider will help you fully capitalize on the strong solar incentives an NJ free solar program still available in 2023.