There’s no more abundant energy source on earth than the sun.
Thanks to the development of solar energy systems, individuals and businesses can harvest that energy to power, light, and heat our homes and offices. While the cost of solar panel installation has decreased over the years, they still carry a heft price tag.
The cost of a solar energy system can be offset with the incentive programs and rebates available to those that install them, you just need to know where to look. But look no further, we’ve gathered a list of programs and rebates you can consider if you’re installing a solar panel system.
Federal Investment Tax Credit (ITC)
The federal ITC applies to your federal taxes. This tax credit allows you to claim a percentage of the cost of a solar energy system. You can get as much as 26% back on your purchase.
And a tax credit functions differently than a tax deduction. A tax credit is a dollar-for-dollar reduction on your overall income tax where a deduction only reduces your taxable income. A tax credit can even result in a refund.
Some states offer similar incentives for solar panel installation. These incentives apply to state taxes and they’re different from state to state.
Solar Renewable Energy Certificates (SRECs)
SRECs are state programs that are available in many states with renewable portfolio standards. Homeowners earn one SREC for each megawatt-hour (MWh), or 1,000 kilowatt-hours (kWhs), of electricity that their solar energy system produces. They can then sell those certificates to utilities or work with a broker to monetize them.
How much additional income can be made from SRECs will vary from state to state.
You may have local solar savings available to you through your state or municipality. Some utility companies also offer rebates for solar panel installation.
Rebates are usually only available for a limited amount of time. Be sure you look into potential rebates before installing solar energy systems to ensure you know all the guidelines and specifications you have to meet.
There’s one additional tax benefit to solar energy systems that’s often overlooked. That benefit has to do with property tax.
In some states, the value of a solar panel system isn’t included in the assessment of property taxes. So while the value of your home will increase when you install solar panels, your property taxes won’t.
Who Is Entitled to Rebates and Incentive Programs for Solar Energy Systems?
Rebates and incentive programs for solar energy systems apply to individuals and businesses, both residential and commercial. However, there is one stipulation that needs to be met in most cases. That is, you must be the owner of the system.
In the case that you lease your solar panel system, the rebates and incentives go to the owner of the system. You can only claim these if you purchased your system with a solar loan or upfront.
More Home Improvement Tips and Advice
Although their hefty price tag is offset by energy savings, solar energy systems are still too big a purchase for most people to even consider. That’s why federal, state, and municipal governments, as well as utilities, offer a host of rebates and incentive programs.
But don’t stop at solar energy in terms of home improvement. Check out our Home Improvement section for more ideas on how to make your home better.