Incentives and Grants

The benefits of using solar power to provide electricity for residential spaces are well-known by now, said benefits including savings on financial costs and saving the environment in your own way. Did you know, however, that the government also provides for other savings when a homeowner decides to use solar power? Yes, indeed, the federal, state and local governments provide for relatively generous incentives, grants and rebates as well as solar energy tax credits for your eco-friendly, do-it-yourself solar power energy power system.

So, before you install the solar panels, batteries and inverters, among other components, which make up the alternative energy system in your home, you must ask the state and local authorities concerned about these incentives. You should be able to save more than a few dollars on the discounts, rebates and grants upon purchase, installation and maintenance of the solar energy system. Plus, the solar energy tax credits applicable on the property also translate to substantial savings in the coming years depending on the existing laws in your area.

This article only discusses the general incentives, grants and rebates offered by the federal and state governments. Ask your concerned local authorities about ordinances related to the use of alternative sources of energy including documentary prerequisites and system requirements. Keep updated, too, about the developments in solar energy and other renewable sources of power generation as the federal and state governments appear to be pushing for more aggressive programs in these areas.

Federal Incentives

In 1 October 2008, the United States federal government signed into law the Emergency Economic Stabilization Act of 2008 that granted 30% solar energy tax credits on commercial applications. The good news for homeowners came in 1 January 2009 when it was declared under the law that the 30% tax credit was also applicable to residential installations and said tax credit was also extended until 2017. This provision effectively eliminated the prior $2,000 maximum limit imposed on residential solar installations.

Homeowners are well-advised to look at the requirements for eligibility for the generous rate of solar energy tax credits available to them. The latest update requires homeowners to comply with the following requisites for eligibility:

• The solar energy system must be in functional service on or after 1 January 2006 at the earliest and on or before 31 December 2016 at the latest.
• The home where the solar energy system is installed and used doe not necessarily have to be the taxpayer’s principal residence
• If your federal tax credit is in excess of your tax liability, said excess amount can be carried forward into the succeeding taxable year

Take note that these solar energy tax credits are considered as personal tax credits. These incentives are also applicable to other alternative energy technologies including solar water heat, wind turbines geothermal heat pumps and fuel cells. Of course, the solar electric technologies particularly photovoltaic panels are still the most popular and most viable of all these renewable energy technologies.

State and Local Incentives

And then there are the incentives provided by the state and local governments on homeowners who install solar energy systems in their homes. These incentives are separate from the incentives granted by the federal government, which translate to greater savings on your renewable energy system. Indeed, it always pays to ask the authorities for more information about your plans to install solar panels in your home since appropriate guidance for cost-saving alternatives and incentives can be referred for your benefit.

Just like the federal government, state and local governments also have laws granting solar energy tax credits to qualified homeowners. You can also ask questions along the following lines to mine other possible benefits of going the solar route that even a few local authorities may not even be aware of:

• Is a sales tax incentive available? This is separate from the personal solar tax credit.
• Will the utility company pay out rebates related to the cost of the system? This is the case with partial off-the-grid solar energy, which is not applicable to complete off-the-grid systems.
• What other possible incentives like discounts and grants on purchase are available?
• What are the ways to secure low-interest loans to finance the solar energy system?
• Is a break on property taxes available for the house? Again, this may or may not be distinct from the solar energy tax credits.

Homeowners can also ask accountants and attorneys for advice on these incentives, grants and rebates just to be on the safe side. Most do-it-yourself resources like e-books complete with video tutorials also provide for relevant information on these matters along with the expert advice on how to choose, install and maintain the DIY solar power energy system.

California is the nation’s leading supporter of renewable energy and it definitely walks the talk. Under the Renewable Energy Rebate Programs, Californians will pay for approximately half of the total costs involved with a grid-tied solar energy system when it is connected to one of these companies, namely, the Pacific Gas and Electric, San Diego Gas & Electric, or Southern California Edison. State solar energy tax credits are also offered.

Many municipalities in California also offer their own versions of solar incentives on top of the existing federal and state programs. For example, Sonoma provides low-cost loans for installation while San Francisco City has a rebate program of $2,000 for photovoltaic system installation.

Texas is also on the forefront of renewable energy despite its status as the second-largest oil producer (Alaska is the first) of the United States. Among its incentives are property tax rebates, net metering and other performance-based incentives.

Virtually all of the states in the United States have renewable energy programs in place. Aside from the solar energy tax credits, other incentives for citizens to shift to solar energy and other alternative forms of electricity generation are property tax exemptions, utility rebates and net metering options. So, if you are considering cutting down on power costs, start with a DIY solar energy system and you will find that the savings starts as early as the installation period and will not end for as long as the solar energy system is in full operation.