Incentives That Will Help You Save on Solar
Updated: Jan 12, 2022
Going solar is more affordable than ever. Imagine taking your utility bill that often ranges from $100 up to $300/mo or more depending on the size of your home and your utility, and switching that for a static, predictable bill that’s half the size.
Even with the amazing financial benefits of solar, governments, utilities, and other organizations are desperately trying to make solar more attractive to homeowners like you.
Rebates and tax incentives are available across the nation to varying degrees. If you’ve ever considered solar, these incentives might just tip the scale in favor of saving you thousands of dollars. In some cases, you can even reduce the cost of solar by up to 50%, which will result in a lot of money saved every month.
ITC Federal Investment Tax Credit
The Federal Investment Tax Credit (ITC) gives 26% of the cost of your solar system back to you in the form of a dollar-for-dollar tax credit. This means whatever taxes you might owe for the year your solar was installed will be reduced by 26% of the cost of your solar system. It’s as simple as that. If you’re looking for even more information about this particular tax credit, We recommend reading through energy.gov’s Guide to Federal Tax Credit for Residential Solar PV.
State Tax Credits
Many states also offer rebates and tax incentives for going solar. This varies depending on where you live, but be sure to check with your accountant or tax professional to ensure you get the most out of your solar system.
In addition to state rebates that might be available, some utility companies and other organizations offer rebates and incentives for people that go solar. These rebates can help you reduce the cost of your solar system, or use the extra cash to go on vacation.
Solar Renewable Energy Certificates (SRECs)
In some states, you can earn and sell SERCs. Some utilities must purchase a certain number of SRECs to prove they are meeting the state’s renewable energy requirements. In most cases, you’ll earn 1 SREC for every 1,000 kWh of energy your solar system produces. 1 SREC can sell for as much as $300 but prices fluctuate due to market forces. An average solar energy system produces about 10,000 kWh annually.
Performance-based incentives (PBIs) and Net Energy Metering (NEM)
While PBIs and NEM are different things altogether, they operate similarly. NEM is an agreement between you (the solar energy producer) and the utility company. They agree to buy the excess power you produce and credit your energy account for a fair amount.
PBIs are incentive certificates similar to SRECs that credit you a fair amount for the energy produced by your solar system. While SRECs are more focused on the environmental benefits of solar, PBIs incentivize the actual energy produced.