Federal Tax Credit
By installing a solar electric system, you will receive a 30% investment tax credit calculated on the total cost of your system. This is a credit against your tax liability, rather than being just a deduction against your income. If you can’t take advantage of the full tax credit in one year, it can be carried forward over into subsequent years until you have taken the full credit. Please consult your tax advisor for details.
In New Jersey, the state rewards businesses that have solar installations with Solar Renewable Energy Certificates (SRECs) for producing green energy. For every 1,000 kWh that you generate from your solar installation, you earn one SREC. At the same time, the Board of Public Utilities is charging utility companies for the non-renewable energy they produce up to a percentage. Utilities have to option of investing in their own renewable energy facilities or they can buy SRECs from other solar installations, such as the one in your home.
For utilities to buy these SRECs, they are traded in the open market and have been traded on the spot market for approximately $700 as of April 2010. A home with a solar system can use SRECs as a revenue stream to earn returns on their investment, or they can surrender their SRECs as repayment for a loan to finance their system.
To find the latest SREC market values, go to: www.njcep.com .