Do you wish you could enhance your standard solar panels a little more?
If you have them at home, you’ll likely contact your electricity provider to see what you can do to save a little more, as well. While many of these plans and incentives will change, there are a few out there.
We’d like to show you the big picture of solar incentives by state. Keep reading to learn more about them!
What Are State Solar Incentives?
State solar incentives are programs designed to make it easier to get, finance, and own solar power systems. These incentive programs are developed and implemented by individual states. This helps to encourage the adoption of solar energy.
Incentives fall into two broad categories – monetary and regulatory. Monetary incentives come in the form of grants, loans, and tax credits to help cover the cost of the system.
Regulatory incentives are laws and policies that make it easier for consumers to use solar. This includes things such as relaxed zoning restrictions and streamlined permitting processes.
Benefits of Investing in Solar Energy
Solar energy is becoming an important source of renewable energy for homes and businesses alike. Here are five benefits of investing in solar energy:
Low Maintenance
Solar energy requires a minimal amount of regular upkeep to perform. Most of this maintenance consists of keeping panels clean and debris-free. There are fewer solar maintenance requirements than with other energy sources.
Most solar panels are installed on rooftops or in other areas away from direct contact with ground-level environmental stressors. Additionally, solar panels have no moving parts. They are unlikely to malfunction or experience mechanical problems.
Cost Savings
Solar energy sources are free and unlimited. Meaning you don’t have to pay for fuel or other associated expenses.
As the cost of electricity continues to rise, having a renewable energy source such as solar helps to offset those costs as well. Solar energy can also generate extra revenue as you sell any excess energy produced back to the grid.
Environmental Impact
Solar energy is a clean, renewable energy source. This emits no air pollutants, greenhouse gasses, or other environmental toxins. With solar energy, there are no associated harmful byproducts of its generation or distribution.
Solar energy does not need any more resources, such as water or fuel, to be generated. It is a sustainable resource that has infinite potential since it can be generated anywhere there is ample sunlight.
Increase Home Value
Solar energy increases home value because it reduces the amount of money paid for electricity costs. It is also an investment that provides an extra return. When new buyers are looking for a property, the presence of solar energy is often noted as a desirable quality.
Increased Reliability
Solar panels provide an uninterrupted and reliable source of renewable energy. This allows you to feel confident that you will have a continuous supply of energy.
With traditional electricity sources, sudden spikes can cause power outages. But solar panels are unaffected by these spikes and can continue to power your home or business.
What Types of Solar Incentives Are Available?
Solar energy is an alternative form of energy that’s becoming popular. And with good reason, solar energy helps reduce the emission of greenhouse gasses. As a result, many countries and states have introduced solar incentive programs.
This is designed to encourage and support people looking to invest in solar energy. These incentives come in the form of tax credits, grants, rebates, and more. The types of solar incentives available are:
Solar Rebates
Solar rebates are usually offered at the state or local level as a form of incentive to encourage the adoption of solar energy. These incentives can be in the form of a subsidy, tax credit, or grant. These offer savings on the cost of the solar system.
Solar rebates are especially beneficial for businesses. They can save thousands of dollars on a single solar project. Residential customers can also reap rewards from solar rebates.
They allow them to enjoy adopting solar energy. The rebates have been updated and altered. So it is important to stay informed of all available rebate programs and how they may help you make the switch to solar more cost-effective.
Tax Credits
Tax credits are a dollar-for-dollar reduction in the amount of taxes you owe. Many states have adopted tax credits for those who purchase solar energy installations or equipment such as solar panels. The ability to claim credit can be a major factor when it comes to deciding whether to buy solar systems.
Solar tax credits act as a rebate, reducing the up-front costs of installing a system. This could make solar energy more affordable for homes and business owners who want to transition away from traditional forms of power.
In some cases, the credit may even cover the entire cost of the installation. This makes solar energy a viable option in many parts of the country.
Solar Sales Tax Exemptions
Under this incentive, states exempt the sale of solar energy equipment from sales tax. This means that the full cost of putting in a solar panel system is not subject to sales tax. This exemption can be found in all fifty states and can save thousands of dollars for customers.
This encourages individuals and businesses to take advantage of the money-saving benefits of solar panel systems. This is because the costs of the solar system can be much lower than traditional energy sources.
Federal Solar Investment Tax Credit (ITC)
This incentive is designed to help reduce the initial investment in installing solar. It also helps make it cost-effective for businesses and individuals. The ITC is issued to solar installation companies under the individual or business’s tax code as a federal tax credit.
Furthermore, this incentive can be used over many tax years. This allows businesses and individuals to use the ITC over several years with each tax return.
Net Metering and Feed-in Tariffs
Net Metering is a policy that allows solar customers to be credited for any excess energy they generate. With a Net Metering system, excess energy produced by the panel is transferred to the electricity grid for a credit rather than being wasted. Feed-in-Tariffs provide fixed payments for solar owners who feed electricity into the grid.
These payments come in the form of a long-term contract. They are usually higher than the retail rate of electricity to incentivize customers to produce energy for the grid.
Property Tax Exemptions
These exemptions reduce the amount of property taxes paid on solar energy equipment. This allows homeowners and businesses to save money and energy more efficiently. The majority of solar energy equipment used for generating electricity and heat is exempt from property taxes in the United States.
In some cases, governments, utility companies, and other private entities may offer extra incentives and discounts. This is to reduce the cost of installation or encourage solar energy investments.
Tax Exemptions for Nonprofits
When a nonprofit organization purchases and uses solar energy, the organization can take advantage of an exemption from state and local taxes on the purchase and installation of the solar energy system. This incentive helps nonprofit organizations save money on their energy bills. It also increases renewable energy generation and contributes to the reduction of their carbon footprint.
U.S. Department of Energy Loan Programs
DOE offers loans to fund energy efficiency improvements, solar energy systems, renewable energy systems, and energy storage systems. Through the loan program, a borrower can finance the entire cost of renewable energy projects. This includes purchase, installation, and maintenance costs.
Additionally, DOE offers loan guarantees for qualifying renewable energy projects. This helps to increase the availability of financing to underserved areas.
Research and Development Grants
These grants provide large financial help. This usually covers up to 80% of the total cost of research and development projects. This allows a company to recoup spending on specialized research and development efforts.
These grants also support innovation. It has also allowed many businesses to explore and develop technologies that can benefit the wider industry.
Additionally, they can be used to assist in the development of solar-specific technologies. This includes things such as new production processes or new solar panel designs, which can help businesses save time and money in the long run.
Clean Energy Initiatives
They are usually funded by the government. It assists in installing solar equipment and upgrading infrastructure. For example, many states offer property tax exemptions for renewable energy systems, as well as incentives.
This includes things such as production or performance payments for individuals and businesses that produce a certain amount of renewable energy. Additionally, some states need particular businesses to install renewable energy systems to qualify for certain benefits such as improved access to government projects.
Strategies for Maximizing the Value of Solar Incentives
The world is going green and solar energy is becoming more of a reality for residential and commercial users in many states. Therefore, it is essential to understand how to maximize solar incentives to reduce the cost of switching to solar energy. Some of these methods include:
Find Energy Grants and Alternate Financing
Grants offered by the Federal government, state governments, and local governments can be used to pay for solar installation when the initial cost is beyond the consumer’s reach. Additionally, some organizations offer low-interest loans for solar installation.
To find out about available energy grants, it is important to research your state’s database of renewable energy incentives. Contact local utility providers for information on grants or financing options.
Research Solar Installation Companies
By researching solar installation companies you can maximize your incentives for solar panel production. Comparing companies can give insight into cost savings, warranties, and quality provided.
It is important to know how to size your solar panel installation based on the energy demands of your home. It is also valuable to compare the installation costs, such as permits and utility charges.
Consider the Potential of Group Deals
Group deals for solar incentives could be an effective way to maximize incentives for those interested in investing in renewable energy. This type of deal could involve groups of people, organizations, or businesses. They all get together and enroll in the available renewable energy incentive programs.
By pooling their resources they can spread the cost of investing in solar or other renewable energy installations. This allows for larger and more lucrative incentives than could be earned by any individual.
Furthermore, this model of group deals could also help to create more awareness and support for renewable energy investments. This in turn could lead to more people making the switch to solar power.
Potential Pitfalls to Be Aware of When Leveraging State Solar Incentives
The most important potential pitfall to be aware of when leveraging state solar incentives is the fact that the funds allocated by the government may be subject to change. The incentives may be reduced, or even eliminated, due to budget constraints or shifts in national policy. It is very important to do research and stay current on any changes that may occur.
Another potential pitfall is that the tax credits offered by the government may not provide the full value of the solar system. Unless a state incentive is available on the purchase price or the interest rate of a loan, the solar system itself may not be a cost-effective investment.
Lastly, potential solar customers should be aware that financing options are often limited. A solar loan may not be secured, which can make the installation or upgrade of a solar system much more expensive than expected. It’s important to research the financing options available and determine if they are a good fit before committing.
A Guide to Solar Incentives and Rebates for Homeowners
State solar incentives can make a huge difference in the cost of going solar. With thousands of dollars in rebates, tax credits, and utility company incentives available.
Research and take advantage of these incentive programs. It can be a great way to maximize the benefits of installing a solar energy system. Learn more about the incentives available in your state and make the switch to solar today!
For more helpful articles aside from understanding about solar tax credit, be sure to check out the rest of our blog.
