Energy bills and electrical rates keep rising across the country. Not only are traditional sources of power getting more expensive, but people’s reliance on fossil fuels is also harmful to the environment. But solar energy is a clean and healthy energy source that is gaining in popularity. With increased demand, solar providers are getting more clever with how they can deliver clean and efficient solar energy to homeowners and businesses alike. Although the initial costs of installing a solar panel system can seem steep, there are numerous incentives, rebates, and other ways to bring down the installation price of a solar panel system.
Many organizations and state governments want to encourage property owners to invest in clean and green solar energy. There are state and federal tax incentives, local rebates, and rewards from individual solar providers such as Encōr Solar that property owners can take advantage of today. Below, we’ll discuss the different solar incentives and how you can effectively lower the costs of your solar panels.
Who is eligible for solar incentives?
Obtaining solar incentives depends on how you finance the system. If you buy the system outright, or with a solar loan, you can take advantage of the incentives listed below. But if you lease your system, the third-party owner of your solar energy system will receive the incentives.
How can you find applicable solar incentives for your area?
Solar incentives can vary state by state, but it’s easy to find the right incentives for your system if you know where to look. The Database of State Incentives for Renewables and Efficiency, or DSIRE, is a comprehensive and up-to-date source of various information regarding incentives and rebates you can search for according to where you live.
Sometimes, you’ll be able to obtain a cash rebate from either the state government, your utility company, municipality, or another entity that promotes solar energy investment. Cash rebates though, are usually time-sensitive and aren’t always available. But rebates can significantly lower the costs of your solar system, sometimes by up to 10 or 20 percent. It’s important that you thoroughly research your area for cash rebates so you can take advantage of any unique opportunities that may present themselves when you’re shopping for a system.
State Tax Credits
Because of the increased burdens and pollution associated with fossil fuels, many states want to encourage people to make the switch to clean and independent sources of energy, solar being one of them. With state tax credits, homeowners and businesses can reduce part of the cost of the solar panel system from their state tax bill. The total amount will vary significantly by state, though.
Investment Tax Credits for Solar Energy
The federal government offers an investment tax credit, or ITC, for property owners to deduct part of their solar costs from their taxes. Homeowners and businesses alike can enjoy federal tax credits of up to 30% of the price of their solar system, minus any cash rebates. But you better hurry. The ITC is set to expire in 2022.
Depending on your state, your new solar system may be exempt from property tax assessments. Even though the value of your property is increased thanks to your solar energy system, your tax bill won’t increase along with it. Also, your solar energy system may also be exempt from state sales taxes, giving you additional savings.