Easy Home Solar Power | What The Solar Tax Incentives Mean For You



What The Solar Tax Incentives Mean For You

Installing a home solar power system can take some money. The good news is there are solar tax incentives, both at the state and federal levels, out there to help alleviate some of the consumer cost. NC State University has the best and most up-to-date website, DSIRE (www.dsireusa.org) that details the federal solar tax incentives as well as each state’s. This is definitely a site to check out before undertaking any kind of major solar power projects!

State Solar Tax Incentives
Some states provide rather generous solar tax incentives. For example, California supports net-metering and has several rebates, loans and grants throughout various counties and regions. Georgia also supports net-metering and gives a 35% tax credit for home solar power installations. Each state has its own plan to help with the purchasing and installing of solar power systems. Check the DSIRE website for your state’s incentives.

Federal Solar Tax Incentives
The federal government has finally shown its committment towards renewable energy by passing H.R. 1424 (The Energy Improvement and Extension Act of 2008). This legislation provides generous solar tax incentives of a 30% tax credit, with no credit limit, for both residential and commercial solar power installations until 2016.

These new solar tax incentives will hopefully be the boost needed to really get the solar market booming. As demand increases, costs to manufacture solar equipment will fall, which will make solar power installations even more viable. And there are new technologies now emerging that are trying to make solar power more efficient and cheaper still. This should provide a real win-win situation for our country and the earth.

It should be noted that there are three common types of solar power: solar power (electric), solar water heating and passive solar space heating. Each technology is very different and provides different functionalities to the home. Each technology also has its own parameters in the solar tax incentives.

  • Solar power is the use of PV arrays to convert sunlight into electricity. The federal goverment will provide a 30% tax credit for this type of installation
  • Solar water heating installation has a credit limit of $2000
  • Passive solar space heating is not covered within these solar tax incentives

Bottom Line
The new federal solar tax incentives makes installing solar power for homes much more affordable. Almost one-third of the cost will become a tax credit. Add in your state’s own solar tax incentives and you could be looking at as much as 65% of the total cost becoming tax credits. This in turn will reduce the amount of time till you start seeing financial savings, year after year, of reduced, or eliminated, electricity bills.

To recap:

  • Your return on investment time will be reduced – you’ll start saving money at lot sooner
  • As energy prices continue to rise, as they always have, you’ll really be saving even more!
  • You are lessening your dependence on fossil fuels and foreign oil
  • You are reducing your carbon footprint!

Keep in mind that the federal solar tax incentives apply not only to equipment, but also to labor for onsite preparation, assembly, installation, and interconnecting the system to the home.