As a matter of policy, these days, federal and state governments are prioritising the promotion and adoption of sources of renewable energy through using cash rebates and tax incentives. Solar energy is one of the key players in the renewable energy market and as such, the incentives are aggressive. What follows is a summary of a variety of solar incentives on offer to the consumer.
The key method the U.S. government utilizes in order to support the use of solar power is that of the Investment Tax Credit (ITC). The ITC allows individuals to deduct 30 percent (from their federal taxes) of the price of a solar system by way of a tax credit.
For individuals or businesses who regularly invest in renewable energy technologies, recapturing the cost of any investment can be done by way of a tax credit through direct reduction of the federal income tax liability.
ITC’s are the principal mechanism for the U.S. government to incentivize the adoption of clean energy, and it will be effective until December 31, 2016. The main proponents of the law include:
It’s worth noting that if you receive a state rebate as well as federal tax credit, the amount of rebate will be subject to deduction based on how the ITC is calculated.
The adoption of solar energy is being encouraged across the United States through the use of state-governed programs. Listed below are the most important types of rebates on offer. Do note that incentives change often.
Some states, which include Arizona, New York, and Oregon, offer tax credits that are similar to ITC’s. The structure varies however. Some states offer the incentive by way of a percentage of the price of the solar system, whilst others base the incentive on an installation’s capacity for power generation.
This incentive is set up to ensure that the addition of a solar energy system to a home has no effect on the amount of annual property taxes. Thus, regardless the installation of an energy system adds value to the home, the full value added will not be subject to tax.
These rebates may be offered as a one-time payment or as an ongoing installment over a certain number of years. They are administered by various agencies around the country and the rebate is generally a calculation based on a system’s capacity. The California Solar Initiative is the best known state rebate program.
A number of states provide loans for renewable energy program installations as well as energy efficiency improvements. The loans attract lower interest rates than are standard and may also have other favorable terms attached.
Grants are also available although they are not as common as other methods of reductions on the cost of renewable energy installations and improvements.
Federal and state incentivized programs are not the only way to encourage home owners and businesses to employ sources of renewable energy.
Most states have some utility and municipality programs available, although California and Oregon have the most.
The best way to find out what is currently available in your area is to visit the DSIRE website (www.dsireusa.org/) .
Solar energy installation still remains a sizeable investment for most people, regardless it has become far more cost-effective over the past decade. In order to make it a more viable option, there are many leasing and financing alternatives. With the latest opportunities to fund
installation projects, it’s now possible to pay in the same way you would when financing the purchase of a house, and arguably the best part Solar Power Tax Incentives & Tax Creditsof it is, in many cases the monthly payments are in fact less than the amount that can be saved on the electricity
There are a few financing options available to you if you prefer to explore this avenue. You need to have good credit standing in order to avail of any of the following.
This type of loan is very similar to a home loan. Before offering a loan however, credit history of the applicant will be assessed and the financer may have some prerequisites such as the installment remaining a permanent attachment to the house. That way it can be treated as a secured loan which is cheaper.
Financing programs are now being offered by solar energy installers who have partnered up with third-party loan providers. This can act as a selling point in order for one installer to win business over another. Upon installation, repayments are made to the lender rather than to the installer.
These types of loans are generally cheaper than bank and installer loans. Nevertheless, the approval process can be lengthy and the requirements to obtain such a loan can be rather restrictive.
A solar lease is in effect a way to rent solar panels for the home. All you have to do is to agree to pay the lease back to a third party lessor. The lessor also may agree to pay for regular maintenance and panel cleaning.