How Solar Incentives From the Government Work (and What Happens When They Don’t Get Renewed?)

Home | Our Blog | How Solar Incentives From the Government Work (and What Happens When They Don’t Get Renewed?)

October 6, 2016 | By RGR Marketing Blog

Don’t Wait Too Long to Go Solar

Back in the early days of home solar, it was justly perceived as an interesting but impractical technology – not because it didn’t work, but because it was prohibitively expensive for the average homeowner. There was a time when the only people who had solar arrays were those who were willing to pay a premium to do their part for the environment and those who needed solar panels to live far away from civilization.

My, how times have changed. While solar still only accounts for a small fraction of the overall U.S. energy market, that share is growing exponentially each year.

Several factors have contributed to solar energy’s surging popularity. For one thing, environmental concerns have made sustainability a priority for many consumers. And because of the marked increase in demand for photovoltaics, the costs have been dramatically reduced. In many markets, solar has reached cost parity with electricity purchased from the utilities.

Advances in Solar Technology Have Brought Costs Down

Thanks to advances in technology, solar arrays are now more efficient than they ever have been, giving solar adopters more bang for their energy-buying bucks. And new financing options have lowered the bar for entry, making solar extremely affordable for the average homeowner.

It’s undeniable that all of these variables have contributed to solar energy’s rise as the power source of choice for environmentally conscious folks, and people who simply want to save money. However, it’s important not to overlook the role that government subsidies have played in bringing solar technology to the forefront of the energy discussion.

In this article, we’ll talk about how government solar incentives work, and what happens when they don’t get renewed.

Solar Investment Tax Credit

This federal incentive is probably the most widely known government subsidy. It allows solar adopters to deduct 30% of the purchase and installation cost of a new photovoltaic or other solar array, minus any applicable rebates.

State and Local Tax Credits for Solar

The federal government isn’t alone in encouraging solar development; some states have also offered tax incentives. For example, Hawaii residents can take a credit for 35% of solar expenses, and Arizona lets solar buyers claim 25% of solar-related expenses as a credit off their state tax obligations. Maryland, California, New York, New Jersey… the list of states that offer lucrative solar incentives goes on and on.

The particulars vary, but for those who live in a forward-thinking state, the incentives can be quite enticing, and many local governments also incentivize solar development, further sweetening the deal.

Solar Cash Rebates

Depending on where you live, you may also qualify for a cash rebate when you install a solar array. These rebate programs are limited in scope and duration, so if they’re available in your area, then it would behoove you to take advantage while the opportunity lasts.

Solar Renewable Energy Credits

Some states mandate that publicly owned utilities source a certain percentage of the energy they sell from renewables, and there’s often a specific carve-out for solar. If they can’t meet the renewable requirements on their own, they may purchase solar renewable energy credits (or SRECs) from solar users. SRECs are sold on the open market, so their value may fluctuate. Still, they can offer thousands of dollars in additional savings.

Net Metering and Performance-Based Incentives for Solar Energy

Under net metering, the electrical meter runs backward and forward, which means solar users can sell their excess electricity back to the utilities when they generate more than they need. When solar energy production is low, they can then buy energy from the utilities, only paying for the net energy they consume over the course of the year.

Solar Property Tax Exemption

Solar arrays are becoming a must-have feature for homebuyers, and solar-equipped homes fetch a premium in many markets. Normally, home improvements result in increased property taxes, but in states and municipalities where solar is exempt from property tax assessments, going solar is a smart way to gain equity without worrying about increasing one’s tax burden.

So, What Happens When Solar Incentives Disappear?

Clearly, there’s a lot of value in going solar. Much of it is inherent, but it’s hard to deny the appeal of all the incentives that often come with the package.

What happens when the sun sets on these incentives? Well, the Federal solar ITC, has been slated to expire several times since its introduction. Each time it was renewed, the solar community breathed a sigh of relief. Currently, the residential portion of the credit is scheduled to gradually ramp down until finally expiring in 2023.

According to industry experts, solar energy will continue to get more affordable, and should offer substantial savings in a majority of energy markets by the time the credit expires. The ITC is often cited as an energy policy success story, but what happens when incentives expire too soon?

The solar community in Massachusetts is currently experiencing such a situation. The state’s net metering policies have been waylaid by disagreements among policymakers, and solar advocates say the local industry is in a holding pattern until those issues are resolved.

The Sun Will Keep Shining on Solar

Clearly, energy policy will continue to affect the timeline of solar’s rise as the energy source of choice. But its eventual prominence seems not to be an issue of “if,” but “when,” with or without incentives. Once solar energy reaches cost parity or offers substantial savings in a majority of energy markets, it will only be a matter of time before it becomes the de facto standard.

After all, going green is an easy choice when it puts more “green” in your wallet.

Start making more
money today!

Get Started

Popular

Recent

Contact Us

Get started with free* leads.

Call us at 310-540-8900

Don’t take our word for it—find out for yourself how good our leads are and what a difference working with us can make.
Call us at 310-540-8900 or fill out the form below and we’ll tell you how you can get high quality leads for free*.

I authorize ReallyGreatRate, Inc. to communicate with me via email.
* Get up to 10% free leads on your first order!

Don’t Wait Too Long to Go Solar

Advances in Solar Technology Have Brought Costs Down

Solar Investment Tax Credit

State and Local Tax Credits for Solar

Solar Cash Rebates

Solar Renewable Energy Credits

Net Metering and Performance-Based Incentives for Solar Energy

Solar Property Tax Exemption

So, What Happens When Solar Incentives Disappear?

The Sun Will Keep Shining on Solar

Start making more
money today!

Search Categories

Latest from Twitter

Contact Us

Don’t Wait Too Long to Go Solar

Advances in Solar Technology Have Brought Costs Down

Solar Investment Tax Credit

State and Local Tax Credits for Solar

Solar Cash Rebates

Solar Renewable Energy Credits

Net Metering and Performance-Based Incentives for Solar Energy

Solar Property Tax Exemption

So, What Happens When Solar Incentives Disappear?

The Sun Will Keep Shining on Solar

Start making more money today!

Search Categories

Tags

Tag Cloud

Latest from Twitter

Contact Us

Let’s connect on social media

Let's talk

Mortgage

Solar

Home Improvement

Start making more
money today!