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Incentives, Rebates, Tax Credits for Renewable Energy

You are eligible to receive income tax credits from the government AND cash rebates or energy credits from your local utility company when you install a solar panel or other renewable energy system. Depending on where you live, you could save 60% or more off the cost of installing solar panels. Rest assured, we can help explain the available programs and make the paperwork easy for you to get low-cost solar installation.

Federal Solar Electric Tax Credit

The U.S. Treasury allows Energy Tax Credits for home or business owner incomes. Taxpayers are allowed one tax credit equal to 30 percent of the qualified investment in solar electric panels, and another equivalent 30% credit for investing in a solar water heating system. Solar tax credits do not apply to solar heating for pools or hot tubs. Remember, always consult your tax adviser, and on your next income tax return take advantage of these solar tax credits.

Download IRS form 5695 for Residential Energy Credits

A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling located in the United States and used as a residence by the taxpayer. Expenditures with respect to the equipment and labor are treated as made when the installation is completed. If the installation is on a new home, the "placed in service" date is the date of occupancy by the homeowner.

  • The 30% tax credit covers all costs, including plans, permits, site preparation, equipment, wiring, labor and installation.
  • There is no maximum credit amount for systems.
  • If the federal tax credit exceeds the tax liability, the excess amount may be carried forward to the succeeding taxable year.
  • Systems must be placed in service before December 31, 2024.
  • The home served by the system does not have to be the taxpayer’s principal residence.


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STATE SOLAR REBATES

The latest information about solar rebates, renewable energy tax credits and other incentives available for solar power systems. Many states offer cash solar rebates and other incentives like sales or property tax exemptions when you install solar panels. State rebates typically range from 10% to 30% of your total installation cost. Use the link map above to learn about the solar power rebates and incentives offered in your state. Select your state from the map below to learn more.

Choose your state from this list to learn about local rebates, discounts and incentives.

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Solar water-heating tax credit

  • There is no maximum credit for systems placed in service after 2008. The maximum credit is $2,000 for systems placed in service before January 1, 2009.
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2016.
  • Equipment must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed.
  • At least half the energy used to heat the dwelling's water must be from solar in order for the solar water-heating property expenditures to be eligible.
  • The tax credit does not apply to solar water-heating property for swimming pools or hot tubs.
  • The home served by the system does not have to be the taxpayer’s principal residence.
  • Note that the Solar Energy Industries Association (SEIA) has published a three-page document that provides answers to frequently asked questions regarding the federal tax credits for solar energy.

Fuel cell credit

  • The maximum credit is $500 per half kilowatt (kW).;
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2016.
  • The fuel cell must have a nameplate capacity of at least 0.5 kW of electricity using an electrochemical process and an electricity-only generation efficiency greater than 30%.
  • In case of joint occupancy, the maximum qualifying costs that can be taken into account by all occupants for figuring the credit is $1,667 per half kilowatt. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.
  • The home served by the system must be the taxpayer’s principal residence.

Wind-energy tax credit

  • There is no maximum credit for systems placed in service after 2008. The maximum credit is $500 per half kilowatt, not to exceed $4,000, for systems placed in service in 2008.
  • Systems must be placed in service on or after January 1, 2008, and on or before December 31, 2016.
  • The home served by the system does not have to be the taxpayer’s principal residence.

Geothermal heat pumps

  • There is no maximum credit for systems placed in service after 2008. The maximum credit is $2,000 for systems placed in service in 2008.
  • Systems must be placed in service on or after January 1, 2008, and on or before December 31, 2016.
  • The geothermal heat pump must meet federal Energy Star program requirements in effect at the time the installation is completed.
  • The home served by the system does not have to be the taxpayer’s principal residence.
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