There are several commercial solar incentives NJ to save money on your business installation. Notably, New Jersey ranks in the top ten states in the United States for solar energy. By 2030, about 50% of state electricity is expected to come from clean, renewable energy sources. Of course, a commercial solar system is a significant investment decision. As a business owner, you need to know which commercial solar incentives are available to reduce your installation costs. This way, you can better understand how your solar system pays for itself in the long-run. Read on to discover the best commercial solar incentives NJ to save money on your business installation.
Federal Investment Tax Credit
First, the federal investment tax credit (ITC) is a great commercial incentive program NJ to reduce your installation costs. Under the ITC, commercial business properties can receive a 26% tax credit for their installation. Notably, customer-site businesses and large-scale utility solar farms are eligible for these solar savings. You just need to purchase your solar system through a cash payment or loan financing. Importantly, leased systems are not eligible for the federal ITC. In addition, your solar project must commence construction before the end of 2022 to get the largest cost reduction. In 2023, the credit lowers to 22%. By 2024, commercial businesses can only receive a 10% credit. Therefore, start your commercial solar project NJ as soon as you can to maximize your cost savings. Certainly, the ITC is a great program to lower the cost of solar panels in NJ.
MACRS Depreciation Incentive
Next, the MACRS depreciation incentive is another New Jersey commercial incentive program to lower your solar system installation costs. Under federal tax code, commercial renewable energy systems can qualify for a 5-year Modified Accelerated Cost-Recovery System (MACRS) depreciation schedule. Importantly, the exact savings for this program vary depending on your business tax rate. Typically, you can offset your solar energy project costs by about 25%. Additionally, the Tax Cuts and Job Acts of 2017 increased the bonus depreciation to 100% for property acquired and serviced before January 1, 2023. Talk to your solar provider to see if you meet the eligibility requirements for this NJ commercial solar incentive.
Transition Renewable Energy Certificates
In addition, transition renewable energy certificates (TRECs) are another NJ business assistance program to save money on your solar installation. A TREC is a certificate that you generate every time your solar system generates one MWh of energy. Notably, the price per TREC varies depending on the type of solar installation. For example, businesses that install photovoltaic panel systems on their rooftop or carport receive $152 per MWh. On the other hand, you earn about $91 per MWh if you install your system on the ground. Importantly, the New Jersey Board of Public Utilities is looking to replace NJ TRECs with the Solar Successor Program. If this new program goes into place, you might only save $85 per MWh. Thus, talk to your local solar panel contractors to save with this commercial NJ incentive program.
Solar Energy Sales Tax Exemption
Moreover, commercial businesses NJ can also save with the Solar Energy Sales Tax Exemption. Currently, the Garden State offers a full exemption from the state’s sales tax. With this incentive, commercial businesses can save 7% on their solar system. Notably, all types of solar energy equipment are eligible for the exemption as long as they are approved by the Board of Public Utilities and Division of Energy. To claim your exemption, you simply need to fill out and submit Form ST-4 to the seller. Indeed, this can serve as a substitute for your sales tax payment. If you have any questions about your equipment eligibility or need assistance filling out your form, talk to your solar installer. Definitely, the Solar Energy Sales Tax Exemption is a great commercial incentive NJ to save on your installation.
Furthermore, net metering is another commercial incentive program NJ to save money on your renewable energy investment. With the net metering program, you can receive credit on your utility bill for any excess electricity your system generates. Typically, this credit is priced at the wholesale value of your electricity production. For example, on a sunny day, your business might use more electricity than it generates. When your annual electric production exceeds your annual usage, your utility meter spins backwards to credit you for this energy. Then, your business can use these credits the following year as needed. In short, net metering is one of the best solar panel incentives NJ for commercial businesses.
There are several commercial solar incentives NJ to save money on your business installation. First, the you can save up to 26% on your installation through the federal investment tax credit. Next, the MACRS Depreciation Incentive can also offset your solar energy project costs. In addition, TRECs offer commercial companies a lucrative system to earn money back for their electric power. Moreover, you can also save about 7% on your solar components through the Solar Sales Tax Exemption. Furthermore, net metering offers a great way to earn credits for your unused electricity. Apply for these commercial solar incentives NJ to save money on your business installation.