People considering installing solar systems in their houses must note that they will enjoy federal solar tax credit. This credit pays for 30% of the total system cost, owing to which people need to cover only the remaining 70% of the price. However, with the decrement of this federal tax credit from 30% to 22%, are the solar panels still worth installing in 2019?
Installing solar panels on your home or business is the best way to save money. However, estimating the cost of going solar varies per project because each home and business has a set of their own unique structure. To get a ballpark estimate, we suggest you to follow the same 6 step process Sunbridge Solar consultants use to estimate…
The Rural Energy for America Program (REAP) Grant, or better known as the USDA REAP Grant is now accepting applications. This includes all large or small farming operations and small businesses in rural parts of Oregon and Washington. If you own a small business, you may qualify for USDA solar grant…
Most reliable solar energy professionals carry a certification called "NABCEP" certification. NABCEP stands for North American Board of Certified Energy Professionals. NABCEP is...
How Does It Work?
The on top of local and state incentives, this federal solar tax credit gives you 30% of the final cost of switching to solar power back in tax credits including supplies, equipment, and labor. Remember, these are not a tax deduction. It is a tax credit. These tax credits will eliminate any federal taxes you owe on a dollar-for-dollar basis, increasing your government refund until it is used up. This means it has direct cash value. Very simple.
Example Of Federal Tax Incentive
Let’s say you purchased a $10,000 solar panel system in 2018. You would be able to immediately remove a full $3,000 from your 2018 taxes when filing them in 2019.
Frequently Asked Questions
When does the federal solar tax credit expire?
This federal incentive will step down to 26 percent in 2020 and 22 percent in 2021. After 2021, the residential credit will drop to zero while the commercial and utility credit will drop to a permanent 10 percent. (Source: Dept of Energy)
How do I claim my tax credits?
Filing for this federal solar tax credit is very easy, also. There is a single, one-page form required, plus your receipt from a reputable, licensed solar installer like Sunbridge.
What if I do not owe $3,000 to the federal government?
The IRS has not been very clear on this point to the date when it comes to the Residential Renewable Energy Tax Credit. However, for businesses they have directly stated that any remaining credit can be passed forward for a full 20 years.
Does Sunbridge Solar file my federal taxes?
No. This is the only incentive we are not allowed to file on your behalf. We are not certified tax accountants and can't give any legal advice. But don't worry, it's simple to fill out! You may find additional support here.
What if I have will already be receiving a refund?
If you are already receiving a refund at the end of the year, this tax credit will usually make that refund much larger since it eliminates your tax liability on a dollar-for-dollar basis.
4 Solar Leases Vs Owning Differences
4 Major Differences Between Leasing and Owning
Solar panel leases have made the dream of going solar available to more homeowners than ever before. But when is a solar lease the right choice to make? In this article, we will lay out the main similarities and differences between owning your own solar system and going solar with a lease. Either opportunity might work for you, and either could be the wrong choice. Both a solar lease and full solar ownership will deliver a financial benefit to you. However, the degree to which this is true varies considerably.
1) Home Resale Value Increases
A fully-owned solar panel system could add resale value to your home.
According to this article from the National Association of Realtors, a study out of California demonstrated an average resale value increase of $5.50 per Watt when homes went solar. In Oregon, the Energy Trust commissioned a market-based study and found home value increases as well.
Unfortunately, there is confusion on whether this increase in home value applies to solar leases, and it may not always apply equally in every jurisdiction.
2) Lock-In Energy Rates
The reality is that power rates are on the rise. Even with lower electric rates, producing your own renewable power locks in the price you pay by using your utility’s net metering program. It works by when you produce excess solar power, your utility will compensate you with an energy credit. You build energy credits in times of excess generation and use your credits in not-so sunny times (e.g., at night).
At Sunbridge Solar, we use top-of-the-line equipment from local, Northwest solar manufacturers. Our equipment carries warranties of 25 or 30 years. A solar lease is usually set for a 20-year term.
Learn More: How Long Do Solar Panels Really Last?
Leased Solar Power Isn’t Forever
Some solar leases are offered as a PPA (Power Purchase Agreement). In a PPA, you pay a reduced rate for electricity over the term of your agreement. Other solar leases are structured so that you receive free electricity while making a monthly solar payment.
In either case, you are getting some rate-hike protection from the power company… but only for a limited time.
On a long enough timeline (usually 20 years), a solar panel lease will end. At that time you will have three choices:
Purchase the array at “fair market value.”
Renew your lease at a new, renegotiated rate.
Having the solar installation removed from your home.
Regardless of your choice, your rate protection will end (or change considerably) at the termination of the lease.
3) Solar Energy Incentives
There are a variety of cash grants, tax credits and rebates available to home and business owners that directly reduce the upfront cost of a solar electric installation
Oregon and Washington state provide lucrative incentives for solar energy systems, making solar a smart financial and environmental investment.
4) Control Over the Quality of Equipment
When you own a solar array, you get to decide what equipment is used in the installation. When you lease a solar panel system, your options are usually limited by the company you lease from.
Many solar owners enjoy the ability to use made in America equipment, products with stronger warranties and products guaranteed to be stringently tested for reliability.