Navigating Solar Incentives For A Sustainable Future
Navigating Solar Incentives for a Sustainable Future
Green Energy: As a clean and renewable energy source, solar energy systems reduce air pollution and the release of greenhouse gases. By decreasing dependency on fossil fuels, they mitigate negative environmental impacts and contribute to a sustainable, green future. To promote this cause for a green planet, multiple incentives and rebates are offered by the federal government, state and even by the utilities. In this blog, we are going to discuss some of these incentives and rebates along with the direct benefit that a consumer gets by installing the solar energy system.
Direct Benefits
There are two main financial advantages that a system owner gets on installing the solar energy system:
Increased Home Value
The research has shown that installing Solar panels at home increases home value by 5 to 6%. Lower electricity bills make the property more appealing, as it enables both immediate savings and a long-term return on investment. Solar-equipped homes are now seen as important assets in the real estate market due to the increased demand for green homes, which raises their market value.
Sustainable Savings
Choosing to install solar is a smart financial decision. Using natural energy sources reduces your dependency on the grid, which lowers your electricity costs. Plus, you’re protected from escalating electricity bills in the future. which makes it a wise and economical decision.
Federal Incentives
The federal government is offering a federal tax credit to the people who are want to install solar energy system. This is in the form of tax credit and eligibility depends on two main factors:
I. You must own the property on which you want to install.
Federal Tax Credit (FTC)
FTC is also known as the investment solar tax credit, that gives you a rebate of 30% on the cost of the installation of a solar energy system in the form of a tax credit.
The tax is available for anyone who installs or upgrades the solar energy system and can be claimed on your annual tax return. If you don’t have enough tax liability to utilize 30% of the tax credit, then the remaining credit will rollover to next year’s tax returns.
Those who choose to finance their solar energy system will get the FTC on the complete loan amount. But if homeowners go for a solar lease, they won’t be able to get this incentive.
State Incentives and Rebates
Solar Energy System Property Tax Exemption
Other than saving on your electricity bills, the solar energy system increases your home value, but you don’t have to pay the extra tax for the higher home value. This is because of the renewable energy system property tax exemption, so that the homeowners don’t have to pay extra taxes as a result of the increased value of their homes after installing solar energy systems. There are 36 states that are offering solar energy system property tax exemptions.
Solar Energy System Sales Tax Incentives
Washington offers a sales tax exemption for purchasing equipment and installing solar energy systems. This exemption can save $2000 for the homeowners going solar. There are 25 states that are offering sales tax exemption. Most states levy a tax on consumer purchases, which can range from 2.9% to 9.5%. This offer is valid un till 2029.
Residential Clean Energy Grant Program
Maryland pays $1000 to the homeowners who install solar energy system at their home. To obtain this incentive, the solar energy system must not be greater than 20 kW and should be located at the primary residence.
Net Metering
It is a billing policy that enables homeowners to save money on their electricity consumption. Solar energy doesn’t produce electricity in the evenings, and a lower amount is produced on cloudy days and in the winter. You can import electricity from the grid, when your solar energy system is producing less than your consumption. Electricity can be exported back to the grid, when it is producing more than your needs. In this case, the utility gives you power credit, which you can utilize later or even roll over to the next month.
One-on-one buyback policy
Some States offers a one-on-one buyback policy for the excess amount of electricity that is produced by your solar energy system. It means that the excess amount of energy is exported at the same rate at which the homeowner will import electricity from the grid. However, the excess energy is credited in kWh instead of monetary credit. For every kWh you send to the grid, you can use 1 kWh from the grid free of charge and it can be utilized throughout the year.
Solar Renewable Energy Certificates (SREC)
This program grants you one SREC for each 1000 kWh your system will produce. These SRECs are then traded on SRECs trading websites. An account is created on the trading website, which is integrated with your bank account. The amount will be transferred directly to the linked bank account Following states offers SRECs to be traded with in the state or even to other states utilities.
• New Jersey • Massachusetts • Pennsylvania • Maryland • District of Columbia • Ohio • Delaware • North Carolina • California • Illinois • Virginia
Georgia Environmental Finance Authority Solar Program
The Georgia Environmental Finance Authority offers a solar credit program for large-scale solar energy systems. The owners can claim this solar credit up to 50% of the qualified cost of the solar project, with an upper cap of $50,000 per year. Although, this program is not for the homeowners, but it is useful for the entities who don’t qualify for FTC.
Self-Generation Incentive Program
Some states offer incentive programs on self-generating electricity. One can get a handsome incentive on installing batteries and reducing their dependency on the grid.
Duke Energy Solar Rebate Program
The Duke Energy offers its customers an exclusive North Carolina Solar Rebate Program to its residential, commercial and nonprofit customers. Homeowners can get $0.4 per Watt up to 10 kW on their solar energy system.
Austin Energy Rebate Program
If you are an Austin Energy customer, you can get $2,500 as a rebate on installing a solar energy system. Moreover, you’re eligible for the Value of Solar Tariff, which means you can get $0.097 per kWh that your solar energy system produces.
CPS Energy Rebate Program
As a CPS Energy customer, a rebate of $2,500 can be received for installing a solar energy system. You’re also eligible for an extra $500 if you install locally-sourced solar panels.
Conclusion:
This is the high time to adopt green energy as it is backed by different incentives and rebates that are offered by the federal government, state and the utilities. As it is a growing sector, all the bodies are supporting solar energy and various programs are available to homeowners who are interested in saving on solar. You can make a combination of the currently available incentives and rebates.
Frequently Asked Questions
Electricity prices are increasing at a minimum rate of 4% annually, so solar is the best investment. As it provides you with free electricity, even if you choose a solar loan, your payment won’t increase throughout the loan term, but your electricity bills will.
Yes, it increases the home value. Its low or no electricity bills, along with its green source of energy, make it more appealing to buyers, as it provides immediate savings and a long-term return on investment.
The federal government, states, and utilities are offering multiple incentives for homeowners to go solar. The federal government is offering a 30% federal tax credit on the complete cost of solar. Some states are offering SRECs to encourage homeowners to go solar. Moreover, some utilities even offer numerous incentives in the form of cash, a buyback policy, or electricity plans with very cheap rates.
These are state incentives. For every 1000 kWh produced by your system, you will get one SREC. This SREC is then traded online, and the amount is transferred to your account.
The cost of solar has indeed decreased over the years, but we can’t expect prices to drop every time due to the increased cost of manufacturing and supply chain volatility. Moreover, you can miss the incentives that are currently offered by the government, which makes solar more affordable.