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New Jersey’s Authority on Solar Energy (732) 269-0308 Info@NJSolarPower.com

Commercial & Residential Solar Incentives

The federal government offers a number of incentives to homeowners and businesses that install solar panels. These solar incentives can help you save money on the cost of your solar installation.

Federal Tax Credit (Updated 2023)

The IRA (Inflation Reduction Act) extends the provisions of the Solar Investment Tax Credit (ITC), so residential homeowners who install designated solar energy systems between January 1, 2022 through the end of 2032 will receive a tax credit of 30% of the cost from their federal income taxes.

How often are you offered a deal with a guaranteed return on investment like that?

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Rebates Extended and Upgraded – Temporarily

The clock is ticking on eligibility for federal solar incentives. The current rebate system, originally enacted in 2008, was granted a multi-year extension in 2015 with the passage of the Omnibus Appropriations Act (P.L. 114-113). As a result, the new “commence construction” language replacing “placed-in-service” extends these tax credits to projects completed by the end of 2023.

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Savings

Savings Protected With Carry-back and Carry-forward Provisions

If you’re unable to use your federal solar tax credit in a given year, it can be “carried back” to retroactively apply to your previous year’s income. Or, it can be carried forward to apply to future annual income totals for up to 20 years.

Federal Energy Policy Act of 2005

A provision in the 2005 Act provided an expansion of the federal energy tax credit for solar systems installed in 2006 and 2007. In 2006, Section 207 of the Tax Relief and Health Care Act (HR 6111) extended these provisions through December 31, 2008.

Authority: Section 48(a)(3) (Investment Credit: Energy Credit) of the IRS tax code.

Tax Depreciation System

Under the current Modified Accelerated Cost-Recovery System (MACRS), solar systems put in service after 1986 depreciate at a rate of five years. For more details, take a look at IRS Publication 946, IRS Form 4562 on Depreciation and Amortization. Visit www.irs.gov and search for any forms you need.

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Solar System 5-Year Depreciation Rate | Year MACRS Depreciation Rate

Year MACRS Depreciation Rate
1 20.00%
2 32.00%
3 19.20%
4 11.52%
5 11.52%
6 5.76%
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Calculating

Calculating Your System’s Rate of Depreciation for Tax Purposes

The one million-dollar project example

Let’s assume your business has a solar system valued at $1 million. Under the MACRS rate of depreciation formula, the taxable basis for the system is reduced by half of the 26% tax credit. That equals 87% or $870,000.

Commercial Program

Commercial loan benefits

With a commercial loan, interest paid is tax-deductible and there is no prepayment penalty. It can be customized to suit your company’s unique payment needs.

Contact Us Today

NJ Solar has been the Solar Power Professionals for over 20 years! Today, the state of New Jersey is a national leader in solar energy, but it wasn’t always that way. New Jersey Solar Power LLC has been there since the beginning of the solar energy revolution in NJ.

With awards for Environmental Excellence and the New Jersey Clean Energy Project of the Year, we’ve built a reputation worthy of being your partner in clean, efficient solar energy. Contact us today to get free customized pricing that’s tailored to your home or business.

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