State-Sponsored Solar Programs
While long-term savings on monthly energy bills can be expected with the installation and use of solar panels, there are also solar tax credits (or investment tax credits), providing up to 30% of the cost of the installed system (depending on the state) to help with short term savings. One of the greatest things about tax credits are that they are often available for both residential and commercial buildings alike, along with having no cap on the value that can be claimed.
Tax Incentives, Rebates, and Other State-Sponsored Solar Programs
In addition to programs helping to reduce taxes, there is also potential of a cash rebate from the state, municipality or utility company. This rebate offered is often 10-20% of the system cost, helping to reduce the cost of the initial installation. One of the most common state rebates offered are Solar Renewable Energy Certificates (SRECs), in the locations where there is a specific percentage of solar power utilities must generate as required by law. In those states, SRECs are purchased by a utility from the homes with solar power systems have been installed to meet the requirement, while the purchase helps to add hundreds or even thousands of dollars to the household income annually.
Also, there are Performance-Based Incentives (PBIs), which offer a kilowatt per hour payment credit for electricity that local solar systems produce. Offered from some local utilities, the difference between the SREC and the PBI, is that PBIs don't have to be sold through a specific market, where SRECs are usually required by some in-state manufacturers, and the rate of the PBI is determined at installation.Additional solar power system incentives include; accelerated depreciations, subsidized loans and tax exemptions. Accelerated depreciation allows businesses to write of the solar energy system while the Modified Accelerated Cost Recovery System (MACRS) increases tax return on solar power investment for up to 5 years. A great benefit of the MACRS when this is available, is up to an additional 30% reduction in system cost, when the MACRS is calculated. Subsidized loans help finance the solar panel system at a low interest rate from the state, a non-government organization or the utility company, for a limited time when state or other rebates are first presented. Then, tax exemptions are simply applied as property value increases with the installation of the solar power system. Additionally, it often means that the purchase of the solar system is exempt from state sales tax.With all of these incredible savings, rebates and growth, there is much to benefit financially with the installation of solar power systems, in addition to the benefits of solar energy to the environment.
Written by Sara McIntosh
Sara McIntosh is a freelance writer and editor who has been working in the web field for approximately 11 years now. With a degree in English, Sara has been writing about many different industries and topics, including sustainability for Greenergy Eco Villages in 2017. Sara has done work in blogs, articles, and copywriting.
