IS THERE SUCH A THING AS FREE SOLAR?
By Irene Heifetz – Guest Blogger for Geoscape Solar
Short answer: NO, there is no such thing as free solar and there is no such thing as free energy.
The passing of the Inflation Reduction Act (IRA) of 2022 contained $269 billion in financial incentives for properties to become more energy efficient. This led to endless advertisements and promotions which promise “free solar” or “no-cost solar” from New Jersey government officials. These ads are actually designed to pique your curiosity and prompt property owners to give out contact information. Most likely you will then be contacted by a for-profit company, that doesn’t offer free solar, and is not affiliated with the New Jersey government.
The climate incentives that were put into place by the passage of the IRA are tax incentives which reward property owners when becoming more energy efficient. One of the most significant incentives is the 30% Federal Solar Tax Credit (ITC). The ITC gives property owners a 30% dollar-to-dollar tax credit towards the cost of installing a solar energy system.
The solar tax credit goes a long way towards offsetting the upfront costs of buying and installing solar energy on your property. It helps your investment in a solar energy system reach a faster Return on Investment (ROI). If you’re a client of Atlantic City Electric (ACE), Public Service Electric & Gas (PSE&G), Jersey Central Power & Light (JCP&L) or Rockland Electric, you’re not getting free solar, but you are freed up from worrying about unpredictable utility hikes and energy inflation. This is in addition to being to energy independent and profiting from a variety of financial incentives to fight climate change.
What ARE the new Energy Efficiency Tax Credits?
The newly passed Climate Bill propels the choice and usage of green energy to be on the same financial playing field as traditional fossil fuels. Not only can New Jersey property owners claim the 30% ITC during the year their solar energy system receives permission to operate (PTO), but they are able to transfer the tax credit to the following year. Non-profit organizations, which were previously exempt from tax incentives, are eligible for a 30% direct pay credit.
The 30% ITC has also been expanded to cover energy storage and battery projects. This applies to electric vehicle chargers AND further expands tax credits to electrical vehicle purchases. It allows up to a $7,500 credit for new domestically manufactured EV purchases and up to a $4,000 for a used domestically manufactured EV purchase.
What are the Tax Rebates for High Efficiency Electric Home Products?
There also are additional tax rebates for New Jersey property owners who install energy efficient products in their home. This includes installing or replacing an energy efficient heat pump, updating insulation, placing air sealants around their doors and windows, or replacing their doors and windows with ones that are more energy efficient. There are also tax credits to be gained by upgrading your electrical box in conjunction with another energy efficiency improvement project. The options are wide ranging. You could upgrade your electrical box for a project as large in scope as installing solar energy on your property, or as simple in scope as replacing your cooktop.
None of these upgrades are free to the property owner. In most cases, there is an annual $1,200 cap on claiming these tax credits, so it makes sense to stagger these improvements to maximize the tax incentives that are available. There is also a $150 tax credit just to get an energy audit of your property. Low income earners are able to claim a higher amount for each available tax credit. In addition to receiving the tax incentive for energy efficiency projects, upgrading your property will lower your monthly utility bill and add to its value.
If Free Solar is a Myth, what can property owners do without the resources for a large cash investment?
Whether you’re a homeowner, a commercial property owner or a non-profit organization, if you can pay your electric bill, you have the resources to go solar. Geoscape Solar offers traditional leases as well as a customized Power Purchase Agreement (PPA). Both options have no upfront costs. It isn’t free solar. Instead, it facilitates third party financing to pay for your property’s solar installation. With a Geoscape Solar Power Purchase Agreement, the financier gets the tax benefits and the property owner pays a fixed reduced rate for producing green energy. If you opt to finance through a Geoscape Solar PPA, your property is still no longer reliant on the grid, it is facilitating the production of green energy, and achieving energy independence.
While there is no such thing as free solar, solar energy has never been more affordable than it is now. The tax incentives and rebates in newly passed climate bill offers property owners a fast ROI, plus the ability to permanently reduce monthly utility bills by creating green energy. By converting to solar energy, you’re not only fighting climate change, but the money that is no longer being spent on rising electric bills, is money that goes back into your pocket or towards your bottom line.
The World is Heating Up – Literally: Geoscape Solar has a vision of living in a world where renewable energy and storage systems replace fossil fuels. Our mission is to build a more sustainable future by creating opportunities for commercial, non-profit, and residential clients to take advantage of the evolution of green energy and help cool our planet. Contact Geoscape Solar to discover more.