The facts about incentives and rebates when owning a solar system.
- Federal Tax Credit: The Investment Tax Credit (ITC) allows individuals to deduct 30% of the cost of a solar energy system from personal federal income taxes with no maximum limit. This applies to both new and existing homes and only those systems that are placed in service by Dec. 31, 2020. In December of 2015, the federal tax credit was extended and will remain at the 30% level until the end of 2019, but it will then ramp down incrementally through 2021 before remaining permanently at 10% thereafter. Simply fill out a one page form as part of your federal tax return, and you’ll get your money as a tax rebate. If you do not expect to owe taxes this year, you can roll over your credit to the following year.
- Residential State Income Tax Credit: States often offer flat amount rebates or a progressive system of rebates based on the size of your solar system. For example, in New York, you can obtain a personal income tax credit equal to 25% of your total costs up to $5,000.
- Property Tax Exemptions: In New York, the property tax code excludes 100% of the value of a solar energy system from your annual property taxes. For example, if your new solar system adds $25,000 to your home value, that $25,000 will not be counted toward your assessed home value when paying property taxes.
- New York State Energy Research Development Authority (NYSERDA) Incentives: The New York State Energy Research and Development Authority (NYSERDA) provides an incentive to eligible installers for the installation of approved, grid-connected photovoltaic (PV) systems. The current base incentive is $.40/watt (W) for up to 25 kilowatts (kW) of installed capacity per meter. Homeowners may be eligible to receive 10% of the cost of energy efficiency improvements, up to a maximum cash back of $3,000, directly from the program. SolarPlus handles all NYSERDA paperwork before the work begins.
- Connecticut Incentives: In March 2012, the Clean Energy Finance and Investment Authority (CEFIA) unveiled its new solar photovoltaics residential investment program. The ultimate goal of the program is to support 30 megawatts of residential solar photovoltaics (PV). There is $40 million allocated to the program. This residential program is limited to owner-occupied homes.
- Lower Income Assistance: NYSERDA also provides assistance to lower income eligible households. Households are eligible for a 50% cash incentive on the cost of approved solar and energy efficiency measures.
SolarPlus has the ability to provide unique financing solutions for your solar project. Our best-in-class investor network enables us to select the ideal partner for every project to arrange attractive financing terms for your needs. With the increasing popularity of solar, a variety of financing options is available to increase long term affordability and savings. Four main types are summarized below. For more information, contact us.
- Like buying a car, pay for the installation up front, or obtain financing via a financial institution.
- Allows you to take advantage of all federal and state tax credits/incentives that apply.
- By owning the system, the federal and state incentives cut the cost of the system in half.
- Typically, after 5-7 years, the system is paid off, and you enjoy the next 20 years of free electricity.
- New York state offers subsidized solar energy loans, and interest on secured loans may be tax deductible.
- Owning increases property value by $15,000 – $20,000 in the Northeast.
- Property taxes cannot be increased.
Lease or Purchase Power Agreement (PPA)
- Solar leases and power purchase agreements (PPAs) are similar to a rental agreement.
- Entitles you to receive all system benefits during the contract term, usually 20 years, but savings is lower than owning.
- Typically comes with little to no upfront costs — just a scheduled monthly payment.
- Does not allow you to take advantage of any federal state tax credits/incentives.
- Leasing benefits those who choose not want to lay out any cash or don’t have tax liabilities to offset the incentives.
- The solar installer retains ownership of the system while it’s in use at your home.
- Community-shared solar systems are gaining popularity in the U.S.
- Ideal for those who rent their homes, have poor credit or cannot install solar due to rooftop and groundmount limitations.
- Each subscriber receives a share of the electricity generated by the community system as a bill credit.
- Not available in all areas – click here to see if your region supports shared renewable projects.
Property-Assessed Clean Energy (PACE)
- Authorized local governments (cities and counties) help property owners finance energy retrofits
- Allows the property owner to borrow money to pay for renewable energy improvements
- Loan is repaid over a period of years through a special assessment on the owner’s property
- Not available in all areas – click here to see if it is offered in your state and country
Selecting SolarPlus as your qualified solar expert will ensure energy savings, predictable energy costs, and guaranteed energy production. Contact us today and speak with one of our solar experts to learn more about your financing options.
Purchase Loan Options:
If your objective is to purchase your system, we offer loan programs where you obtain the Federal and State incentives at the start of a project, no interest charged, as long as you pay it back come April.
- Home Loan or Home Equity Line of Credit: Similar to taking out a bank loan to finance a remodel of your home, some banks will offer loans to finance solar systems. Homeowners with higher credit scores will find it easier to receive these loans. The bank may have requirements that the system is permanently attached to the home so it remains part of the property which allows the bank to treat the system as a secured loan and therefore offer a lower interest rate. Average interest rates for these types of loan are similar to or slightly higher than a home mortgage.
- Installer Loan: We have developed partnerships with third-party loan providers that allow us to offer financing programs to our customers. We coordinate the loan and help you with many of steps in the process, the third-party (usually a bank or national loan provider) will provide the cash to pay for the system. You will then make payments to the third party loan provider. The interest rates for installer loans are similar to or slightly higher than a home mortgage.
- Energy Finance Solutions: Using their On-Bill Recovery Loans, you get a rate that is as low as 3.49% up to $25,000 through NYSERDA. This provides the convenience of repaying energy improvements through an installment charge on your utility bill. We like to think of it as swapping payments. What you used to pay the utility now goes towards your own solar system.
- NY-Sun Affordable Solar: In New York, if your income is below 80% of the mean income for your county, you can qualify for further incentives to reduce the upfront cost of a solar electric system.
- FHA Title One Loans: Secured and unsecured loans up to $25,000 to eligible borrowers. Pre-approval within an hour and funding as little as 4 days.
- Other Loan Partners: We work with Sungage, Spruce, and many others who offer low interest loans as well.
To help you understand how these tax incentives, rebates, and finance options operate and how long it may take the solar system to pay itself back, call us today at (877) 523-5223 or contact us for your free on-site evaluation.