The government of the United States offers tax credits to homeowners who decide to go green with solar energy. Accordingly, homeowners as well as businesses can deduct certain portion of solar installation costs from taxes under the federal or Investment Tax Credit (ITC) scheme. Either of these qualifies for federal tax credits worth up to 30% of the overall cost of solar panels system excluding cash incentives or rebates. To learn more about solar tax credits offered by the federal government, the timeline for which is until the end of 2022, consult a solar specialist today!
There are few states which provide additional tax credits to homeowners for getting solar panels systems installed in their homes. The amount of tax credits can vary from state to state but the process could be very much identical to the one of federal tax credits.
States, municipalities, utility companies and many organizations offer cash rebates to encourage homeowners to go solar. These can help in reducing costs for installing solar panels by almost 10 to 20%. But cash rebates are available for a limited span of time and can end once a part of installation work is completed.
In some states, it is mandatory for homeowners to generate some percentage of electricity by using sunlight. For residents of such states, the system generates Solar Renewable Energy Certificates or SRECs for electricity which is produced by solar systems in homes. By selling these SRECs, extra money can be earned, possibly hundreds or even thousands of dollars. Utility companies purchase the SRECs and can count solar power usage in your house to determine whether it meets your household’s energy requirements.
Performance-Based Incentives or PBIs are being provided in some state governments or utility companies. These pay homeowners, with solar energy systems at homes, incentives in the form of per kilowatt-hour credit for amount of electricity which is produced by solar panels systems installed in their homes. To be eligible for receiving this benefit, some PBI programs may need people to get solar panels equipment that is manufactured in their state. However, PBIs don’t need to be sold in market as is in the case of SRECs. The incentive rates are determined at the time of installation of the system. Besides, PBIs can even replace or co-exist along with net metering facility.