There’s no denying that going solar is one of the smartest choices you can make for your home, your wallet, and the environment. But with all the different solar incentives out there, how do you know which ones are the best for you? In this article, we’ll take a look at the top solar incentives you should be taking advantage of today.
Federal Solar Tax Credit (ITC)
The federal solar tax credit, also known as the investment tax credit (ITC), is perhaps the most significant incentive available to homeowners looking to go solar. This credit allows you to deduct up to 26% of the cost of your solar energy system from your federal taxes, making it a valuable investment for your home and wallet.
If you decide to install solar panels on your home before December 31, 2023, you can claim the full 26% credit. After that, the credit will decrease to 22% in 2024 before phasing out completely for residential systems in 2026. Commercial systems, however, will continue to receive a 10% credit beyond 2026.
State and Local Solar Incentives
While the federal solar tax credit is the most significant incentive available, many states and local governments offer additional incentives to make going solar even more attractive. These incentives can include cash rebates, performance-based incentives, and property tax exemptions.
The availability and amount of these incentives vary widely depending on where you live, so it’s important to do your research to find out what’s available in your area. A great place to start is the Database of State Incentives for Renewables and Efficiency (DSIRE), which offers a comprehensive database of state and local incentives for renewable energy.
Net metering is a policy that allows homeowners with solar panels to receive credit for the excess energy their system produces. When your solar panels generate more energy than you need, that energy is fed back into the grid, and you receive a credit on your utility bill. This means you can use that credit to offset the cost of the energy you use when your panels aren’t generating enough power.
Net metering policies vary by state, so it’s important to find out what’s available in your area. Some states have strong net metering policies that allow you to receive full retail credit for your excess energy, while others have weaker policies that offer only a fraction of the retail rate.
Solar Renewable Energy Certificates (SRECs)
In addition to the incentives we’ve already mentioned, there’s another valuable incentive available to homeowners in certain states: solar renewable energy certificates, or SRECs. SRECs are tradable certificates that represent the environmental benefits of generating clean energy. For every 1,000 kilowatt-hours (kWh) of solar energy your system generates, you’ll earn one SREC.
These certificates can be sold on the open market to utilities and other companies that need to meet renewable energy requirements. The value of SRECs varies depending on supply and demand, but they can be worth hundreds of dollars each in some states.
Solar Loans and Leases
Finally, there are a variety of financing options available to help you go solar without breaking the bank. Solar loans and leases allow you to install solar panels on your home with little or no money down, and then pay off the cost of the system over time.
Solar loans typically offer lower interest rates than traditional home improvement loans, and you can use the federal solar tax credit to help pay off the loan faster. Solar leases, on the other hand, allow you to lease the solar panels from a third-party provider for a fixed monthly fee. With a solar lease, you don’t have to worry about the upfront cost of purchasing and installing solar panels, but you also won’t be eligible for the federal tax credit.
Choosing the Right Solar Incentives for You
With so many solar incentives available, it can be overwhelming to know which ones are the best for you. To make the right choice, it’s important to consider your budget, your energy needs, and the incentives available in your area.
If you have the funds to pay for your solar energy system upfront, the federal solar tax credit and net metering are the most valuable incentives to take advantage of. However, if you need financing to cover the cost of the system, solar loans or leases may be a better option.
Additionally, it’s important to research the state and local incentives available in your area. Cash rebates and property tax exemptions can significantly reduce the upfront cost of going solar, making it a more affordable investment in the long run.
Going solar is a smart choice for your home, your wallet, and the environment. With so many incentives available, there’s never been a better time to make the switch to renewable energy. By taking advantage of the federal solar tax credit, state and local incentives, net metering, SRECs, and solar loans or leases, you can make the transition to solar energy even more affordable and beneficial for you and your family. So, start exploring your options today and see how you can start saving money and reducing your carbon footprint by going solar.