Solar Tax Credits and Rebate Programs
One of the major reasons that people choose to remain in business with traditional energy providers rather than take steps to convert their homes to solar power has to do with the initial costs of these types of systems. Even though you're saving money on your solar power bill each month, you're still paying thousands of dollars for initial equipment purchase and installation costs. Even if you choose to lease a system instead of purchase one outright, you could still be looking at an initial investment of upwards of $3,000.
The good news is, there are a variety of solar power incentives, solar power rebate programs, and other options that can help ease a bit of the financial burden associated with this important decision.
Types of Rebates and Tax Credits
There are many different types of solar tax breaks and other solar rebates available for people to take advantage of depending on the situation. Some are performance based, for example, including the solar renewable energy credits that are available in almost every state. The performance-based incentive Solar Renewable Energy Certificates (SRECs) sees a maximum incentive of around $0.50 per kilowatt-hour of electricity generated by the system.
Many states also have their own rebate programs designed to help offset some of the costs of purchasing eligible systems. The state rebate program in the District of Columbia, for example, offers residential solar thermal system owners a maximum incentive of up to $2,000 per system per year. When coupled with solar tax credit programs that can help recoup some or all of the initial investment cost, solar energy suddenly doesn't seem as prohibitively expensive as it once did.
Federal and State Tax Credits
When discussing federal and state tax credits and other rebates, it's important to understand that it is possible for consumers to take advantage of both of these types of programs at the same time. The United States government, for example, allows purchasers of a solar panel system to receive a 30 percent income tax credit on the total cost of the system. North Carolina is an example of a state that offers a 35 percent income tax credit towards the cost of the system. When you claim both of these incentives at the same time, the overall cost of the system begins to quickly decrease in a dramatic way.
Eligibility Requirements and Deadlines
Eligibility requirements for solar energy tax credits and rebates will vary depending on the exact program that you're taking advantage of. To qualify for the state rebate program in Washington DC, for example, your equipment needs to be brand new and must have a performance meter with remote communications capabilities. In addition, the system itself needs to carry at least a one year warranty, must be rated and certified by the Solar Rating & Certification Corporation (SRCC), and must meet other industry performance standards.
Additionally, the project installation must have been completed within six months after the initial approval stage has completed and that a licensed contractor has installed all solar PV or thermal systems. Self-installations are usually not allowed under the rules and conditions of these types of programs.
Deadlines for these types of programs, including personal tax credit programs, vary depending on the situation. However, so long as the program is still running and you are eligible, you may claim the associated credit at any time. The Residential Renewable Energy Tax Credit offered by the federal government, for example, operates between 2006 and 2016. However, depending on when you claim the credit, you may have to wait until the following year's income taxes to receive that financial assistance.
State Incentives and Helpful Links
Almost every state in the country offers some type of incentive program to help make solar energy more affordable to consumers everywhere. The US Department of Energy's (DOE) Database of State Incentives for Renewables & Efficiency, or DSIRE.org, has compiled a helpful list organized by state that allows users to quickly see which programs are offered, how you have to qualify, the deadline to apply and more.
The DOE has also compiled a page detailing information about residential renewable energy tax credits and savings programs that are available to consumers.
Solar energy tax credits and rebates are designed to help relieve purchasers of some of the costs associated with buying such a system. Between the initial savings and the tax credits received from state or federal programs like those available from the DOE, every type of system becomes economically feasible and all types of consumers can reap the financial and environmental benefits associated with them.