Solar energy delivers positive environmental impact, contributes to our nation’s energy independence, and provides more jobs than the coal industry, and upstream oil and gas sectors in the United States.1 To encourage the continued expansion of solar, the government, utilities and other organizations, such as The Solar Foundation, in the US offer solar tax breaks and financial incentives to make solar more accessible for today’s homeowners and businesses.
Federal and state solar energy incentives make investing in residential solar more affordable than ever. Here are some solar energy incentives you could take advantage of today that will provide significant savings for your efforts:
How to Take Advantages of Solar Energy Rebates and Incentives
Solar energy systems have a great reputation for offsetting the cost of its installation through its energy savings. But there are also many types of solar energy rebates and incentives you can take advantage of, which can vary by state. Here are some of the most common.
1. Tax Credits
A tax credit2 is an amount of money that taxpayers can subtract from the taxes they owe to the government. Tax credits are claimed when you file taxes from the previous year. If you made a solar investment that was approved by the government in that previous year, you would be able to deduct that amount when you file your taxes with the government. All products that are eligible for tax credits for residential energy efficiency are labeled with an Energy Star certification.3
Rebates, on the other hand, work differently than tax credits by getting cash back into your hands more quickly after you switch to solar. While there are no federal rebates for energy efficient purchases at this time, many state governments, local governments, and utility companies offer cash rebates for the purchase of energy-efficient products. Some manufacturers offer specials and sales that make it easier to power your home with clean, renewable energy.
Solar Energy Financing
In addition to the advantageous rebates and solar tax credits, there are also financing and power purchase agreement (PPA) options available that are making solar cheaper than ever before. Since 2010, the cost of solar has dropped about 1/3 and is outperforming coal and gas.4 Today, you can even go solar with zero out-of-pocket expenses, which is a great option for individuals who are strapped for cash but want to go solar.
What is the EPA’s Energy Star Program?
A great way to get your energy savings started is through the U.S. Environmental Protection Agency Energy Star program. The EPA’s Energy Star Program5 is a voluntary program that helps homeowners save money and protects our climate through superior energy efficiency products.
Federal Solar Incentives
When doing your research about solar panels, you probably came across the federal solar incentives investment tax credit (ITC), which was implemented in 2006.This tax credit allows you to claim up to 30% of the price you paid to install solar panels when you file your taxes, which cuts the cost of going solar significantly. Sadly, unless the policy is reinstated, this federal investment tax credit is set to expire December 31, 2021 with a gradual step down each year in the credit value.
Solar Energy Rebates and Incentives by State
In addition to the great federal solar incentives, many states offer additional tax credit and rebates. There are currently several states with rebates and incentive programs that you can receive to help you pay for your new solar system. Furthermore, there are various programs that will help you offset the cost of your solar energy system and the cost of making your house greener. For the most up-to-date list of all energy incentives for your state, visit the Database of State Incentives for Renewables and Efficiency6