Solar Rebates & Federal Tax Credits
Renewable Energy Rebates
The California Solar Initiative subsidizes the initial cost of grid-tied solar electric systems by providing rebates. California's highly successful solar rebate program has resulted in over 30,000 grid tied PV systems being installed in California over the past several years. This rebate is funded by a public goods charge, which appears on the utility bill for participating utilities and is administered by PG&E for some northern California locations. This rebate money pays for about 5% of the cost of a grid-tied photovoltaic system. As of January 2012 the rebate for grid tied residential PV systems in PG&E territory that are less than 100 kW is slightly less than $250 per kW AC, depending on design factors that consider estimated system performance issues such as tilt, shading, orientation and regional solar irradiance levels. The rebate will drop periodically as megawatt triggers are reached.
Check out the current rebate levels and scheduled future rebate levels on the PG&E Trigger tracker page: (http://www.csi-trigger.com)
Rebates are reserved on a first come first served basis. Horizon Energy Systems accepts this rebate as partial payment towards the upfront system cost. It is required that a permit be obtained, the utility notified and an interconnection agreement between the utility and the customer must be signed to qualify for the rebate. For large PV systems over 100kW in size there is a performance based incentive program that pays the owner monthly, based on actual kWh solar generation.
Federal Solar Tax Credits
Income producing businesses can claim a 30% Federal tax credit, as well as depreciating a solar system investment over an accelerated 5 year time period. These two benefits reduce the payback period for businesses when compared to residential solar electric systems.In August 2005 the Energy Policy Act of 2005 was signed into law. This created a new 30% Federal tax credit for solar electric and solar hot water systems "placed in service" between 1/1/2006 & 12/31/2008 (capped at $2,000 for residential systems, with no dollar amount cap for commercial solar systems, except the tax credit can only be carried over for 2 years for commercial applications.
In the U.S.A. Federal tax credits apply to the after rebate cost of the solar energy system.
In October 2008 The Emergency Economic Stabilization Act of 2008 was enacted and included a number of tax incentives to encourage solar energy investments: (1) a full 30% (uncapped) tax credit for residential and business applications (2) a tax credit that can be claimed even for individuals subject to the alternative minimum tax. These renewed tax credits apply to solar energy systems "placed into service" for tax years between 1/1/2009 and 12/31/2016. The removal of this $2,000 cap for residential PV systems installed in 2009 or later is a significant new incentive for PV system customers. Payback times are reduced dramatically for the average residential solar energy customer as a result. Refer to the updated Solar Energy Industry Association's fact sheet about the Federal Solar Investment Tax Credits for tax years 2009 through 2016.
In the U.S.A. for residences who install an active solar energy system (PV or hot water, but not pool heating) the Internal Revenue Service tax form used to claim the Federal income tax credit is 5695. You may want to keep your final invoice as documentation to justify claiming of this tax credit in case you get audited by the IRS.
California Solar Property Tax Exemption
In California state law provides for a property tax exemption for solar PV and solar hot water systems (per California Revenue and Taxation Code, section 73. Note this law remains in affect until Jan. 1, 2017, unless it is renewed, which is likely). This means that for active solar energy systems the original owner of the property will not be subject to an increase in property taxes due to the installation of a solar energy system. In 2008 a letter was sent from the State Board of Equalization to the County assessors to clarify this issue. When the property containg the solar energy system is sold, however, the value of the solar energy system can be included for property tax assessment purposes for the new owner of this property.
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