Solar Electricity Incentives

Federal Programs

• The Residential Renewable Energy Tax Credit allows residents a 30 percent tax credit on solar photovoltaic systems, with a maximum cap of $2,000 for systems installed before Dec. 31, 2008. No maximum exists for systems installed after Jan. 1, 2009, through the program's end on Dec. 31, 2016. The Residential Energy Conservation Subsidy Inclusion, as a personal exemption, allows nontaxable subsidies from utility companies in the form of rate reductions or electric credits to customers who participate in utility energy conservation programs. Such customers should check with a tax adviser for information on possible tax exemptions.

  Energy Efficient Mortgages -- low-interest financing options for home energy upgrades -- allow homeowners or buyers to finance energy projects through monthly savings in utility bills. EEMs include a secured loan through the Federal Housing Authority or the U.S. Department of Veterans Affairs, each with different borrowing criteria. Secured mortgages guarantee loans for those interested in energy improvements while protecting lenders against loan defaults. The other type of EEM, offered by lenders and not secured, allows homeowners to borrow up to 15 percent of the home's value for energy improvements identified by a home energy rater during an energy audit.

State and Local

• Most state and local energy authorities offer rebates and incentives in the form of property tax exemptions and tax credits for solar electric systems, similar to federal programs. Solar electric rebate programs typically offer a certain amount of incentive per watt for the system. For example, for a three kilowatt (kW) system, an incentive amount based on $1.50 per watt yields an incentive of $4,500. The incentive usually has a maximum monetary cap and system size.

Utility Incentives

• Public, cooperative and private utility companies offer incentives or rebates for solar electric systems to reduce the need for new power-generation facilities. Utilities may release awards in stages, based on a home energy audit and a post-installation inspection. Owners of solar electric systems also benefit from net-metering, which allows customers to sell excess power back to the utility grid at a wholesale rate.