Government agencies, utilities and other authorized bodies offer a myriad of rebates, incentives and tax credits to encourage efficient energy usage, support the use of renewable energy products, and above all help to conserve energy to reduce pollution.
Solar energy has many benefits and contributes to a nation’s energy independence. It only has encouraging environmental impacts, but also offers more jobs than other sources of energy like coal, oil and gas sectors. To encourage these positive growths, governments offer solar panel rebates and tax breaks to make solar systems more affordable and accessible to modern home owners. As a result of these citizens in US alone can cut down on the costs of solar panel systems up to 50%.
Solar panel benefits available for businesses and home owners
Investment tax credit
The Federal Government offers a solar tax credit called Investment Tax Credit ICT. This allows the solar owners to deduct a section of their solar purchase cost from their taxes. This is 30% of the solar cost less any cash rebates. This incentive ends in 2022. Here is more information on the federal tax credit.
State tax credit
There are some states that provide extra tax credits for erecting a solar panel system. With this state solar financial incentive, you qualify to deduct a portion of the solar cost from your state tax bill. Although similar to ITC, they vary from one state to another.
Sometimes a buyer of solar system can receive cash rebates from the state, utility agent, municipality or any other authorized organization. These rebates are limited to a certain period of time and end after specified amounts of solar panels have been installed. The cash rebates can reach up to 20% off the solar system cost.
Solar Renewable Energy Certificate (SREC)
Some states require a certain percentage of power electricity to be generated from solar systems. Those that live in these states enjoy SREC. The authorities will buy your certificate and count your power consumption. You can earn lots of money if you decide to redistribute your solar power, depending on the current market value of energy in those states.
Performance based incentives
They function like SREC where states pay solar panel owners per Kwh credit for the power they generate or consume through the solar system. Some states offer this incentive only if owners have bought solar panels manufactured in that state. Unlike SRECs, they are not determined by the market rates but by the authorities.