Solar Electric Incentive Status: What’s Changing and What’s Not

A lot of people have been asking us what incentives are still in place for 2012. The answer: All of them. While there were a few changes in 2011, the majority of programs that will impact the average homeowner remain the same. Here is an overview… 

30% Federal Tax Credit is still available. Now it
applies to your 2012 taxes. It is a credit, not a deduction. If you buy a
$10,000 solar system, you can write off $3,000 from your taxes owed. Don’t pay
enough taxes to get the full amount back? You can take up to 5 years to claim
the full amount. Application is simple, just fill out IRS form 5695 and submit
it with your tax returns (this applies for the 2011 tax year as well.). This is
for Electric Solar Systems and Solar Hot Water. The current expiration date
is 2016. 

Production Incentive is still available. This is
the payment the utility makes to you for all the power you produce, whether you
use it or it goes back out to the grid. They pay you up to 54 cents per kWh, up
to $5,000 per year. This payment comes to you once a year in the form of a
check from the utility. This is for Grid Tied Electric Solar Systems. The
current expiration date is 2020. 

Net Metering is still in place. This is the
credit the utility gives you for the electricity you send back to your
neighbors. When a solar electric system is installed, we change out your
current meter for a bi-directional meter, so it keeps track of what is coming
and going. On your utility bill, there will be a credit for the power you send
back. This is for Grid Tied Electric Solar Systems. There is no expiration
date. 

Reduced Sales Tax changed a little in 2011. Now
the way it works is…systems under 10kw are sales tax exempt. No sales tax is
ever paid. On systems larger than 10kw sales tax is paid up front, and you can
then apply for a 75% sales tax credit. It is very rare that a residential
system is larger than 10kw, so most of you are not impacted by this. This is
for Electric Solar Systems. The current expiration date is 2013. 

Accelerated Depreciation is for businesses. 50% of the
system cost can be depreciated in the first year, and the remainder over the
following 4 years. That is 5 years to 100% depreciation. This is for Electric
Solar Systems and Solar Hot Water.