Have you been dreaming about adding solar energy to your home? Perhaps you are worried about rising electricity costs? Maybe you want to switch to clean energy?
As you begin to research solar energy for your home, you will find a variety of rebates and incentives designed to make residential solar energy affordable. The good news is that savvy customers can take advantage of many solar energy rebates and incentives at the same time. Because these programs vary from state to state, this article will map out categories of rebates and incentives, and then give you a list of resources where you can find out exactly which ones apply to you.
Residential renewable energy tax credit
The federal residential renewable energy tax credit is the most impressive of the incentives available. Administered through the Internal Revenue Service, it is available to customers throughout the U.S. Taxpayers may claim 30 percent of the cost of their solar energy system as a credit on their income taxes. If this credit exceeds their tax liability for that year, it may be carried over into the next tax year. Qualified costs for this tax credit include the system components, installation and any costs related to wiring the system into the home. There is no maximum limit to this credit, but it is set to expire in 2016 and it is unclear whether or not you will be able to carry this credit beyond 2016.
To put this in perspective, according to the report “Solar Power on the Rise,” issued by the Union of Concerned Scientists, the average cost of a residential five-kilowatt system has fallen from $32,000 to under
$23,000. A 30 percent tax credit for this system would be $6900, cutting the price to $16,100 before any state, local or utility incentives are applied.
State tax incentives
At least 45 states also offer state tax incentives to residents who want to add solar power to their homes. Vermont offers a renewable energy systems sales tax exemption for residential solar power systems. New Jersey offers a property tax exemption for renewable energy systems. Massachusetts offers a tax credit program similar to the federal tax credit. Residents qualify for a tax credit of 15 percent of the cost of a residential solar energy system up to a maximum credit of $1,000.
Local solar incentives
Many local governments offer rebates and incentives to encourage people to invest in solar power. In Colorado, for example, the City of Boulder offers a 15 percent rebate on the sales tax paid for solar photovoltaic installations, and the city of Fort Collins offers low rate loans to customers who want to finance a new residential system that can be paid through their monthly utility bill for terms as long as 20 years. The city of Healdsburg, California, is offering rebates up to $4,480 per residential solar PV system in an effort to meet the state’s mandate of increasing home solar energy production.
Local utilities offer solar rebates and incentives
Lastly, many local utility companies and cooperatives offer solar financial incentives. The San Miguel Power Association in Colorado is offering rebates up to $2,250 to residential customers who install a solar PV system. The Columbia Light and Water utility company in Missouri is offering up to $5,000 per photovoltaic system to residents in their service area. Similarly, the New Hampshire Public Utilities commission administers a Residential Small Renewable Energy Rebate Program that offers up to $3,750 or 50 percent of the total cost of the system (whichever is less) to residents who install a solar photovoltaic system.
Where to find more information
According to experts in the field, combined incentives in leading states can reduce the cost of a residential solar energy system to less than $10,000. Based on this, John Rogers, a senior energy analyst, notes that “people are seeing payback periods of as little as 4 to 6 years.”
To find specific information about the rebates and incentives that apply to your area, here are three recommendations:
- Visit the online Database of State Incentives for Renewables & Efficiency. This database allows you to search by state, type of renewable energy and type of incentive.
- Visit the Tax Credits, Rebates and Savings listings found on Energy.gov. This database can also be filtered by state, eligibility and type of savings.
- Talk with a reliable solar energy systems provider, such as RGS Energy. These professionals will know all the current rebates and incentives that you will qualify for based on where you live. Further, try to find a provider that has been in the business for a long time as they can offer a valuable perspective into how costs and incentives have evolved over the years.
Installing a solar power system on your home is an amazing opportunity to add value you to your house, lower your tax liability, stabilize uncertain utility costs, and help move our country toward clean energy production. Fortunately, there are multiple layers of rebates and incentives available to consumers. Take advantage of these cost-saving opportunities now!
RGS Energy, founded in 1978, is a market leader in solar energy system installation. To learn how solar could lower your electric bills and to get a free quote, visit RGSEnergy.com.