| Uncle Sam is continuing to make it easier for | | | | programs that enable residents with a |
| homeowners to include solar energy as a viable, | | | | photovoltaic system to "sell" the extra electricity |
| and affordable, means of powering their homes. | | | | they obtain back to their energy companies. If |
| Not to be outdone, the majority of states are | | | | the customer's system generates more than |
| also devising ways to encourage their residents to | | | | they consume the specially built meter simply |
| "switch on" to renewable energy, many times | | | | spins backwards. All utilities in the US are required |
| through electric companies. Renewable energy | | | | to purchase back consumer-produced power, but |
| includes leveraging the power of the sun. Here are | | | | the rates at which they do so varies widely. |
| some examples of how both forms of | | | | Renewable Energy Credit (REC) |
| government are attempting to do so. Be sure to | | | | Producing renewable energy is a seen as a good |
| check out dsire.org for more information on all | | | | thing of course, and installing a system can create |
| incentives as they can be complicated and are | | | | a credit which traditional utilities and state |
| constantly changing. | | | | governments want to buy. This usually takes |
| Federal Tax Credits | | | | form as a check written directly to the |
| With the adoption of the Energy Policy Act of | | | | homeowner for a percentage of the system. In |
| 2005 and the subsequent Energy Improvement | | | | Colorado for example, Xcel energy will pay $1.50 |
| and Extension Act of 2008, Americans are now | | | | per watt in REC's when you install a system and |
| eligible for a 30% rebate through the Federal | | | | connect it to their grid. Some manufacturers, such |
| Government toward a residential solar power | | | | as Sharp, will even deduct this amount off the |
| system. In addition, there is now no limit to the | | | | price of the system and then pursue the credit |
| amount that can be claimed toward the cost of a | | | | from the utility. This makes it easier for the |
| photovoltaic system. In the past, the amount was | | | | customer to afford the system since they wont |
| restricted to $2,000. The rebate currently covers | | | | have to wait for the utility rebate, which can take |
| both the cost of the materials and the labor. For | | | | a few months. |
| example, a PV system with a cost of $25,000 | | | | Feed-in Tariffs (FiT) |
| would be eligible for a $7,500 credit. A credit, | | | | As an extension to the process of buying back |
| unlike a deduction, is applied directly to the taxes | | | | energy, the state of California and the city of |
| owed, so would therefore reduce your total | | | | Gainesville, Florida have begun enacting feed-in |
| taxes owed to the IRS by $7,500. | | | | tariffs (FiT). FiT's are designed to pay for the |
| Along with their normal tax forms, residents | | | | installation of a solar power system plus a small |
| would use IRS Form 5695 to earn their rebate. | | | | profit. California electrical company, Southern |
| Something to keep in mind however is how this | | | | California Edison, requires that clients sign a |
| relates to other incentive programs. Talk to your | | | | long-term contract for 5, 10, or 15 years, but the |
| accountant on how to treat this credit, plus any | | | | price is adjusted based on the time of day of the |
| other rebates and incentives you might be | | | | power generation. For example, for a system |
| receiving. Generally the 30% credit is taken on | | | | producing power throughout the day, a 15-year |
| the cost of a system AFTER other rebates. | | | | contract signed with SCE would earn about 15 |
| Municipal Financing | | | | cents per kilowatt-hour on a summer weekday, |
| Another attempt at making solar power attainable | | | | while a system generating power from 8 a.m. to |
| for the everyday homeowner is a program that | | | | 6 p.m. (such as a solar power system), would |
| allows the cost of the PV to be covered by | | | | earn about 22 cents per kilowatt-hour under the |
| municipal tax funds over an extended period of | | | | same circumstances. Overall, the tariffs range |
| time. In most case, this payment plan lasts for | | | | from 8 to 81 cents per kilowatt-hour. This |
| twenty years. If the home is sold before that | | | | encourages both production of renewable energy |
| period is up, the solar power system, and | | | | and conservation of existing energy since every |
| whatever tax liability remains, go to the new | | | | penny a producer saves off consumption will go |
| owner of the home. The program is usually | | | | straight to their pocket in production. However, |
| funded by municipal bonds. Many cities in California | | | | sometimes residents earning the tariff cannot |
| have incorporated this program, as well as some | | | | participate in other state incentive programs. |
| cities in Colorado, Maryland, and Louisiana. | | | | For more information on Solar Incentives and |
| Net Metering | | | | Rebates, visit our website. |
| Many energy companies are implementing | | | | |