Can the Solar Tax Incentives Spark New Life in Solar Energy Usage?
There have been solar tax incentives in the past.
The problem was that they didn't really do much to help the homeowner get solar energy in their homes.
However, there is now great news for the renewable energies! Part of the Economic Growth and Financial Stabilization Act of 2008 (HR 1424 EAS) includes the extension of the tax credit for renewable energies that was set to expire at the end of 2008.
But the solar industry really capitalizes on this extension in that the package also removed the $2000 limit on residential installations.
To think about the impact of the solar tax incentive, take an example of a home installation costing $40K (equipment & installation.
) Prior to this incentive, the homeowner would get a $2000 credit from the federal government, effectively lowering the price to $38K.
Now, starting in 2009, that same $40K installation would receive a $12K credit, effectively lowering the price to $28K.
Thanks to this solar tax incentive, homeowners can really see a substantial gain on their payback, cutting it down by almost half.
Between federal and most state incentive programs, consumers can now see tax credits that cover up to half, in some cases over 60%, of their home solar power systems.
Prior to this extension, the payback from installing an average solar power system in a home was usually around 10 to 15 years (with exception to California where they have had incredible rebate/incentive programs).
But this was acceptable because most solar power systems have life expectancies of 20 - 25 years - you still have 10 to 15 years of "free" electricity! Now, with the solar tax incentive, we're looking at a payback reduction of almost half the time, with the solar panel life expectancies on an upward rise.
Couple this with the fact that most states now have legislation covering "net-metering", home-generated solar power becomes more and more inviting to the average consumer.
Net-metering is where the home-owner is hooked up to the utility company and buys, like normal, any electricity they need, but also, "sells" any excess electricity produced from their solar panels as a credit to their account.
So not only can the homeowner reduce their electric bill by creating their own electricity, they can reduce it even more by "selling" their excess back to the utility company!
The problem was that they didn't really do much to help the homeowner get solar energy in their homes.
However, there is now great news for the renewable energies! Part of the Economic Growth and Financial Stabilization Act of 2008 (HR 1424 EAS) includes the extension of the tax credit for renewable energies that was set to expire at the end of 2008.
But the solar industry really capitalizes on this extension in that the package also removed the $2000 limit on residential installations.
To think about the impact of the solar tax incentive, take an example of a home installation costing $40K (equipment & installation.
) Prior to this incentive, the homeowner would get a $2000 credit from the federal government, effectively lowering the price to $38K.
Now, starting in 2009, that same $40K installation would receive a $12K credit, effectively lowering the price to $28K.
Thanks to this solar tax incentive, homeowners can really see a substantial gain on their payback, cutting it down by almost half.
Between federal and most state incentive programs, consumers can now see tax credits that cover up to half, in some cases over 60%, of their home solar power systems.
Prior to this extension, the payback from installing an average solar power system in a home was usually around 10 to 15 years (with exception to California where they have had incredible rebate/incentive programs).
But this was acceptable because most solar power systems have life expectancies of 20 - 25 years - you still have 10 to 15 years of "free" electricity! Now, with the solar tax incentive, we're looking at a payback reduction of almost half the time, with the solar panel life expectancies on an upward rise.
Couple this with the fact that most states now have legislation covering "net-metering", home-generated solar power becomes more and more inviting to the average consumer.
Net-metering is where the home-owner is hooked up to the utility company and buys, like normal, any electricity they need, but also, "sells" any excess electricity produced from their solar panels as a credit to their account.
So not only can the homeowner reduce their electric bill by creating their own electricity, they can reduce it even more by "selling" their excess back to the utility company!
Source...