Federal, State and Local Tax Credits for Solar Panels
Posted by lindseyshoe
Installing solar panels can be expensive – but in the long run can save you money. But how do you find ways to afford this green improvement to your home in the short term? By using federal, state and local tax credit opportunities. FInd out how!
As the 2009 tax season approaches many people are once again investigating how they could lower their taxes in the future. The good news for people who would like to go green and lower their tax bill is the Economic Stabilization Act or H.R. 1434 that bailed out Wall Street also included an extension of the solar investment tax credit. This is an exciting tax credit for people who want to go green and become more energy independent. H.R. 1424 improved the federal tax credit from an even $2,000.00 to up to 30% of the total system and installation cost. It also extends this eco-friendly tax incentive for the next eight years.
So if you’ve ever considered going solar and installing photovoltaic solar panels, there’s never been a better time. The $787 billion dollar economic stimulus packaged signed by President Obama gives a big incentive for families to solar. The federal tax credit is even available to those who are receiving a state or local tax credit.
The Advantages of Photovoltaic Solar Panels:
* Sunlight is plentiful.
* Using solar power is pollution free.
* Little maintenance or intervention after initial installation.
* Solar electric generation is economically smarter where grid connection or fuel transport is difficult.
*Solar electric can displace the highest cost electricity during times of peak demand and reduce grid load.
* After up front capital, operating cost are low.
* High efficiency solar cells have efficiencies of over 40% and efficiencies are rising while production costs are decreasing.
*May be eligible for local, state or federal tax incentives.
Photovoltaic production has been doubling every year since 2002. Financial incentives have been growing strategically throughout the world to increase this greener energy alternative. Australia, Germany, Japan, Israel, Spain, Greece, France, Canada and the U.S. all have financial incentives for investing in these eco-friendly solar systems. Countries going solar promote national energy independence, the creation of high tech jobs as well as a reduction of greenhouse gas emissions.
Know Your States Solar State of Mind
The federal tax credit is available regardless of whether or not someone is getting a state or local tax credit or other tax incentive and many states, including California, Oregon and Hawaii, and even cities do have them so it is worth finding out the facts at your city or state’s official web page. Electric companies also offer rebates. For example, Austin Electric in Texas offers a $4.50/watt rebate.
An example:
In California, the state offers rebates to anyone who installs solar systems. The state rebate is currently $1.55 per watt for those in the Pacific Gas and Electric region. It’s estimated that the solar systems and installations cost about $8.10 per watt. According to a California green advocacy group, Vote Solar, the rebate generally equals about $4,650.00, which brings the cost of the photovoltaic solar system down to about $19,650.00. If you add in the 30% federal tax credit that knocks the price down another $5,895..00 reducing the overall cost to $13,755.
That’s still a lot of money but there’s even more good news. Some cities such as Berkley have a solar financing program that lets homeowners take up to 20 years to pay for the cost of their solar system. San Francisco and other cities plan to follow.
There are other tax incentives covered as well. Qualified solar water heating cost is a 30% up to $2,000 tax credit, qualified small wind energy is a 30% up to $4,000 tax credit and qualified SEER 13-16 air conditioning and heat pumps have a 30% up to $1,500 tax credit. If the 30% of costs is higher than the max these tax credits can be rolled over to the next year.
So you can go green and save some green with tax credits, rebates and incentives. Obama’s stimulus package with the solar investment tax credits may just stimulate more green investments that will help bail out the environment.
7 Responses to “Federal, State and Local Tax Credits for Solar Panels”
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tont goffe says:
could you tell what the applicable rebates are for Cheyenne, Wyoming???
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FIRST AND FOREMOST I JUST WANTED TO SAY THANX FOR OPENING MY EYES UP TO THE GREEN MOVEMENT, THE MANUAL THE THREE CHALLENGES TO SOLAR ENERGY WAS VERY INFORMATIVE A BIT SHORT BUT INFORMATIVE. I REALY LOVE GREENJOYMENT I THINK I’VE FOUND MYSELF A HOME.
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Anonymous says:
Hi,Mr. Jonathan I really want to do something with my life with GreenEmployment. I want to work in this field, but don”t know where to start. Is there any gov. assistance where i can get educated in this field. Thank you.
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Anon . . thanks so much for your comments. Since I don’t know specifically what your qualifications are I would suggest checking out the US Green Building Council, they offer educational programs and grants (see our article on the USGBC) there are also local chapters you may want to see if their is one in your area.
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David Holt says:
Where i live in texas, one of oncore energy’s requirements for grid tie solar panel systems says that all equipment will be new and should have a 5 yr warranty.
Does this mean I can’t build my own solar panels?
David -
Hey David! Thanks for your question. This is probably a better question for Oncore Energy (Is it Encore Energy?) because we don’t really know. I would call them and ask.
Hope that’s helpful! If you do decide to build your own solar panels, definitely check out the guide we posted at http://www.greenjoyment.com/how-to-build-your-own-solar-panel-solar-cell-electricity.html
HELP…what about Clearwater FL…Progress Energy and Teco are raising RATES!!! again…for a 2017 plant…Consumers pay for it upfront!!! Ch13 keeps telling us to buy a 16 seer for 11,000…HELP! Media is NOT on Consumers side….these guys are prediators!