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Solar power incentives

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By Shannon Bell

Anyone who’s looked into installing solar panels for their home know that solar power for the entire home is very expensive. At minimum, most homeowners can expect to pay at least $15,000. At maximum, homeowners may pay as much as $45,000 or even $60,000 for a solar panel array that will power their entire home.

However, both federal and state tax credits aim to encourage homeowners to take on a solar project anyway. The federal government, according to the US Department of Energy, will kick in 30% of the cost for a solar project registered before December 31, 2016. A 30% tax break would bring the cost of a $15,000 solar project down to $10,500.

This tax credit, established by the recent Recovery Act, is called the Residential Renewable Energy Tax Credit. The credit applies to solar-electric systems (solar panel systems used to power the home), small-scale wind turbines, solar water heaters, and geothermal heat pumps.

The advantage to the Recovery Act credit is that there is no maximum dollar amount that the credit will pay for. In other words, whether you have a small solar panel array or a huge home with a huge array, that 30% will still apply.

Before you install solar energy, you might consider making your home more energy efficient. The more energy efficient your home already is, the smaller and less expensive your solar panel system will be.

As it so happens, there are also federal tax incentives for weatherizing your home and upgrading your appliances to appliances with the Energy Star label. This tax credit is called the Home Energy Efficiency Improvement tax credit, and there’s also the Weatherization Assistance Program for low-income homeowners.

State Tax Credits

You can save even more money when you combine the federal tax credit with local state (and even city) tax credits. These tax credits vary widely from state to state; the best place to check the tax credits in your state is the Database of State Incentives for Renewables and Efficiency (DSIREUSA.org).

Some states are well-known for their progressive programs to help homeowners pay for renewable energy. These states include:

  • California — probably the state with the best incentives in the country
  • States in New England despite the propensity for cold and snow, northeastern states have some very good programs available to help residents go solar
  • Colorado Colorado has a history of caring about their natural resources, so it’s not surprising that their incentives (combined with federal stimulus money) can potentially cut the cost of installing solar by two-thirds
  • Louisiana and North Carolina if you live in the southeast, Louisiana and North Carolina are the best places to live when it comes to solar incentives

About the Author of this article

Shannon Bell writes for residentialsolarpanels.org a non commercial blog focused on her Photovoltaic experiences to help people understand how and why they should save energy starting investing in solar power. She writes on solar energy for Homes to help people learn how to start save energy from the scratch and then apply those experience to the next level.

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6 Responses to “Solar power incentives”

  1. Several objections come to mind. For instance, McMansions will never be environmentally friendly and the government should not use our tax dollars to make it easier for people to feel green when they live in houses that are much bigger than they need. If they cared about the environment, they wouldn’t put a huge array on their huge house, they’d buy a smaller house. So this provision uses “green money” to facilitate anti-environmental practices.

    “The advantage to the Recovery Act credit is that there is no maximum dollar amount that the credit will pay for. In other words, whether you have a small solar panel array or a huge home with a huge array, that 30% will still apply.”

  2. solar water heater is a great alternative to conventional electric heaters which costs much,`:

  3. solar water heaters are great for reducing electricity bills and you also help the environment**”

  4. solar power is great because it is a reneweable source of energy and non-polluting too.’.

  5. solar water heaters are also energy savers, they help me save electricity bills from each month*,~

  6. solar power has lots to offer that is why we should improve our technology in harnessing the energy coming from the sun ::