There are so many benefits to going solar. Not only can you take a giant step towards helping the environment, but you can also save a lot of money by making the switch to this renewable energy source. In fact, in order to encourage homeowners and business owners to go solar, federal, state, and local governments, as well as utility companies, are offering incentives, rebates, and tax credits to anyone who wants to jump aboard the solar energy train. These programs will help make going solar more affordable, and will put more money back into your wallet.
Federal Tax Credits
One of the financial benefits of switching to solar power is the federal tax credit you get for installing solar panels. The federal solar tax credit allows homeowners and business owners to deduct 26% of the cost of their solar system from their taxes. This credit reduces your federal income taxes, while also reducing the upfront costs of installing a solar system. If you are considering installing a solar system, you might want to act fast, as the value of the tax credit will drop down to 22% in 2021, and will no longer be offered after 2021.
Net Metering Program
You can also save money through Net Energy Metering (NEM). This billing mechanism is available in almost every state and allows you to sell any extra solar electricity that your system produces back to your local utility company. Your solar panels convert the sun’s light to electricity, which is sent to your electrical grid.You may not use all of the energy produced, so if you have a surplus, your utility company will either give you money back or a kWh credit, which you can use on cloudy days or at night.
Solar Renewable Energy Credits (SRECs)
There are also other types of credits available to some solar customers. In some states, you can earn and sell Solar Renewable Energy Credits (SRECs) for the electricity that your solar system produces. This incentive program allows you to earn one SREC for every 1000 kilowatt hours produced by your solar panel system. You can then sell these certificates back to your utility company for up to $300 each.
For example, a typical solar panel system is 5 kW, which will produce 5-8 MWh of electricity per year. If the SRECs you earn are worth $100 each, then you can make $500 to $800 per year just from the SRECs.
Another way to save is with good old fashioned cash rebates. Some solar panel manufacturers will periodically offer mail-in rebates on their products. These rebates are usually only available for a limited time, and can help reduce the costs of your installation by as much as 10% to 20% or more.
Solar Tax Exemptions
In addition to all of these incentives, state and local governments also offer tax exemptions to help you go solar. These include:
- Property Tax Exemptions– Installing solar panels will most likely increase the value of your home. This exemption allows you to deduct this added value from your property’s value for tax purposes. So even if your property value goes up after you install solar panels, this exemption will allow you to keep your property taxes at their original level.
- Sales Tax Exemptions– This provision exempts you from paying sales tax when purchasing a home solar system, reducing the upfront cost of going solar.
All of these different kinds of rebates and incentives are available to home and business owners to make it easier for them to go solar. Taking advantage of these money saving options will help cut the cost of installation, as well as lower your electric bills. If you would like to know how much you can save on solar system installation and on your energy costs, we will help you find any and all incentives within your area. To get free quotes and find out how much you can save, enter your zip code on the homepage, or to speak directly to one of our agents call (888) 290-3112.