Solar resources and solar incentives for homeowners
Are you thinking about adding solar panels to your home? Before you begin to crunch numbers on the costs of solar panel systems or make that first call to a solar panel provider, you should gain a clear understanding of what it means to go solar and control your energy needs with the power of the sun. We encourage you to take the time to research solar energy and the options available for installation of a solar energy system. We’ll get you started with a number of solar resources.
Be sure to investigate solar companies before you purchase or lease a solar panel system. The best solar companies in San Diego use teams of licensed electricians with experience in installing solar panels and connecting home solar systems to the electrical grid. Make sure to look into the quality of the solar panels offered by the companies you explore, as well as the warranties they offer. There are differences between high-end and low-end solar panels, including how efficiently they generate electricity and how long they last. Compare how long solar companies have been in business and the number of installations they complete each year. Read customer reviews of solar companies on their websites and on independent sites such as Yelp, Google, Facebook and BBB.org and check out whether they offer referral programs. Baker Solar Electric has prepared a checklist to help you evaluate and find the best solar companies in San Diego and other Southern California cities.
State and federal government resources
San Diego Gas & Electric offers independent, well-researched information on determining whether a solar system is right for your home. Its website includes detailed information on Net Energy Metering, community sustainability programs and downloadable fact sheets.
Likewise, the federal government’s Department of Energy provides a wide range of news and detailed information about renewable solar power and solar energy systems. Its Energy Saver web pages offer background on planning renewable energy systems such as solar panels, including comprehensive explanations of solar cells and semiconductor materials, home solar electric system arrays and energy performance of solar components
Organizations that support solar programs
A number of non-profit and other organizations support solar programs, including —
The Solar Energy Industries Association is the national trade association representing organizations across the U.S. that promote, manufacture, install and support solar energy. Its members include installers, project developers, manufacturers, contractors, financiers and non-profit organizations involved in the solar energy development. SEIA conducts research for the solar energy industry, champions the use and expansion of solar energy in residential and home environments, and educates the public on the many benefits of switching to solar energy.
Local grassroots organizations, such as Vote Solar and The San Diego Sierra Club, also seeks to bring solar energy into the mainstream and transition the nation to solar panel use.
The California Solar Energy Industry Association, or CALSEIA, includes a San Diego chapter the mission of which is to “promote, foster, and advance the use of solar energy systems in the San Diego region through cooperative action of the members of the local solar industry.” Baker Electric Solar has been a proud member of our local chapter of CALSEIA for many years.
The National Council for Solar Growth is non profit group with a mission to educate homeowners and businesses about the economic and environmental benefits of PV solar. They have a ton of great unbiased information to help you get started.
Solar Investment Tax Credit
The federal solar Investment Tax Credit (ITC) is a dollar-for-dollar reduction in federal income tax for anyone who purchases solar panels for their home or business. The amount credited through the ITC program is equal to 30% of the purchase price of your solar system. It’s not a rebate (which helps you pay for your system directly), and it’s not a tax deduction (which reduces your total income and decreases your tax bill by a small amount). ITC dollars are those that you don’t have to pay the IRS, or that the IRS will refund to you if you’ve overpaid.
Since its implementation in 2006, the ITC has helped spur the renewable energy industry boom, driving competition and innovation and reducing costs and carbon emissions — a win-win for consumers and the environment.
What are the limitations of the federal solar tax credit program?
Any U.S. taxpayer who purchases a solar system outright is eligible for the federal government’s solar tax credit program. No matter how you buy your system — with cash or through a loan or line of credit — you can take advantage of the program for a limited time. You will not, however, be eligible for the solar tax credit if you install your system with a solar lease or Power Purchase Agreement since the leasing company actually owns the system. Remember, the program represents a tax credit, not a rebate. You must incur a tax liability to benefit from the program. If you don’t pay income tax, you won’t be able to use the credit toward the purchase of a solar panel system for your home.
What is the deadline for claiming the Investment Tax Credit?
If you’re thinking about installing solar panels on your home, you’ll benefit by taking advantage of the generous ITC program in the near future. The ITC was set to expire at the end of 2016; but as of December 2015, it’s been extended. The credit will now retain its 30% rate until 2019. However, the rate will fall to 26% in 2020; and by 2021, it will drop to 22%. After that time, the tax credit will remain at 10% for commercial solar uses and reduce to 0% for residential projects.
Qualifying for the federal solar tax credit
Since the federal solar tax credit represents a reduction in federal income tax for home solar buyers, you need to have enough tax liability to qualify. You also need to have purchased your solar system. Talk with your tax professional if you’re unsure whether or not you qualify.
IRS Form 5695 is the appropriate form used to apply for federal tax credits, including the solar Investment Tax Credit, for residential energy saving measures. You can claim the credit if you made energy- saving improvements to your home, such as installing a solar electric system, solar water heating system, geothermal pump, etc.
The form is available on the website of the Internal Revenue Service or through your local tax office. The form must be submitted with the personal income tax 1040 return of the homeowner claiming the tax credits.
Please contact your accountant if you have specific questions regarding your eligibility for and claim of the federal solar Investment Tax Credit.
Some solar incentives no longer available
A number of California solar initiatives are no longer available, such as the California Solar Initiative, Emerging Renewables Program and Self-Generation Incentive Program. These solar incentives were used up quickly as use of solar energy grew but are no longer necessary to get a good deal on a solar system because of falling prices. In fact, according to the Solar Energy Industries Association, the average cost of a U.S. solar panel system fell 70% between 2009 and 2015. This significant drop in prices, coupled with federal tax credit incentives, make purchasing solar systems more affordable now than ever.
California Solar Initiative
The California Solar Initiative program began in 2007 and provided incentives to homes and businesses within the state that installed solar panel systems. The program expired as of 2014.
Go solar with one of the best solar companies in San Diego, Baker Electric Solar. Click here for a free solar energy quote.