- What is the initial cost of solar panels?
- What kind of payback can you expect on a solar panel system?
- What kind of payback can you expect with a solar thermal water heating system?
- What incentives are available at the state level?
- What federal tax credits are available for solar panels?
- Is there a maximum federal tax credit amount for eligible systems?
- What if the credits exceed your tax liability?
- Is a tax credit the same as a tax deduction?
- Can a home buyer access the tax credit before filing their tax return?
- What is net metering?
- Will adding a solar system increase the value of your home?
- How can solar systems minimize the effects of rising energy costs?
What is the initial cost of solar panels?
An average cost of a PV System ranges from $5.5 to $7 per Watt depending on whether you are a residential or commercial installation. The solar panel system will vary greatly based on your power needs and the specifics of the site. We only serve residential solar system needs.
What kind of payback can you expect on a solar panel system?
With all of the federal and state tax credits/rebates currently available, you could possibly cover most of your initial expenses within the first few years. Once installed, solar panels can save you up to 95 percent on your monthly energy bills. SDG&E will still have a meter charge around $5 per month. This means an immediate payback to you every month.
What kind of payback can you expect with a solar thermal water heating system?
Water heating is responsible for up to 17 percent of your energy consumption. A typical solar water heating system can save you 75 percent on your water heating energy costs. This system typically will pay itself off multiple times over its lifespan. Savings will vary based on the number of people living in the home, climate and a number of other factors.
What incentives are available at the state level?
Solar incentives are available in many states but differ in each. State incentives range from credits or rebates to property tax exemptions and utility rate discounts. Tax credits and rebates can be up to 50 percent of the cost of the system. Specific details on available state incentives can be found by visiting the website www.dsireusa.org. CA rebate is $0.65/watt. For example, a 3.0kw system will qualify for a $1,950 rebate.
What federal tax credits are available for solar panels?
The federal government offers a tax credit equal to 30 percent of a solar system’s cost. Home and business owners may claim 30 percent of the total cost until the end of 2019. After 2019 the tax credit will decrease to 26 percent of a solar system’s cost and will continue to decrease each following year. To ensure your full tax credit contact us today!
Is there a maximum federal tax credit amount for eligible systems?
The American Recovery and Reinvestment Act of 2009 removed the maximum credit amount of $2,000. Currently, there is a 30 percent maximum Federal Tax Credit amount on solar panels or solar thermal water heating systems. This tax credit amount will decrease on 12/31/2019 to 26 percent and will continue decreasing each following year. Contact us now to ensure you receive your maximum discount!
What if the credits exceed your tax liability?
If a tax credit exceeds your tax liability, that additional amount can usually be carried forward to the succeeding taxable year. Example: You paid $28,800 for a PV solar panel system after the California Rebate. Your maximum tax credit amount is $8,640 or 30 percent of the system’s $20,160 net cost. If your tax liability is $5,000, you can claim a maximum of $5,000 on your taxes. The additional $3,640 tax credit can be claimed on the following year’s taxes.
Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,640 in income taxes and who receives a $8,640 tax credit would pay nothing.
Can a home buyer access the tax credit before filing their tax return?
Yes. Prospective homebuyers who will be adding either of these solar systems and believe they will qualify for the tax credits are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take-home pay.
Buyers can adjust their withholding amount on their W-4 via their employer or through their quarterly, estimated tax payments. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS on income tax and possible interest charges and penalties.
What is net metering?
Available in CA, net metering is an incentive for consumers to invest in renewable energy systems. Net metering measures excess electricity produced through the solar system by spinning the energy meter backward, banking the electricity until needed. This provides the customer with full retail value for the electricity produced. Customers receive retail prices for excess electricity they generate through solar power. Interconnecting with the utility is done using a standard meter.
Will adding a solar system increase the value of your home?
The Appraisal Institute has published articles showing a $10 to $20 increase in home value for every $1 in reduced utility costs. Showing a potential home buyer the monthly energy saving from the solar system can create instant additional value for your home. The panels are also easily recognizable and can create added value simply upon a potential home buyer’s first look at the home.
How can solar systems minimize the effects of rising energy costs?
Installing a solar system is like insurance against future energy cost increases. The more you take advantage of solar power, the less you are exposed to energy cost increases.