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While the cost of residential solar in Charleston has decreased dramatically over the last decade, it is still a significant investment for homeowners and businesses trying to reduce their power costs.
Many programs and incentives are available around the country to assist you in installing, generating income, and recovering money from your solar installation. The federal government, state and municipal governments, and even certain corporations all offer incentives to make solar panels more inexpensive and available.
When you start looking into the incentives that apply to you, you may come across a lot of technical jargon. This article is intended to provide an overview of the many types of incentives that may be available to you.
Types of Solar Rebates and Solar Incentives
The programs listed below are meant to assist homeowners in financing their solar projects. These programs will make your new solar panels more accessible by lowering their price.
Solar incentives are typically given for a short time and expire once a particular amount of solar has been installed in your area. These solar subsidies might lower your system expenses by another 10% to 20%.
Following the purchase of their system, the owner receives a partial refund. Typically, this entails purchasing solar panels from a solar vendor and then submitting a rebate application to the utility company, local government, or other institution in charge of the rebate program.
Solar Tax Incentives
When governments wish to encourage the use of solar power, lowering the tax burden on photovoltaic technology is a systematic method. On the other hand, governments may give tax breaks for solar-powered houses and businesses. Exemptions and credits are the two most prevalent forms of tax advantages.
A tax exemption for solar energy is removing a tax that would otherwise apply. This lowers the cost of ownership for solar panel installations, encouraging households and businesses to utilize them. Many states in the United States use the following tax exemptions:
Property Tax Exemption
As the value of a building rises, so does the related property tax. On the other hand, many governments have agreed not to tax any gain in property value as a result of solar panels. The residence is evaluated as if it were not equipped with a solar power system, lowering the homeowner’s tax burden.
State Tax Exemption
Some states provide extra tax credits for installing solar panels, which work similarly to the federal ITC but are applied to your state taxes. These payments vary significantly by state, but they may add up quickly when combined with the federal ITC!
Solar Investment Tax Credit
By far, the most substantial solar incentive is the federal investment tax credit (ITC). The ITC reimburses you for 26% of what you paid for solar on your taxes.
A tax credit directly balances what you would otherwise owe in taxes, instead of to a deduction, which decreases your taxable income (as would any charitable gifts you make in a year). In other words, rather than being taxed on a reduced income, the federal ITC reduces your tax liability and may even return to you as a refund.
Solar Renewable Energy Certificates (SRECs)
Many states currently have renewable portfolio requirements, which mandate that utilities purchase or create a particular amount of their electricity from renewable sources, such as solar power.
If you reside in one of these states, your solar panels will generate solar renewable energy certificates (SRECs) for the quantity of energy they generate.
Because each SREC is indicative of the environmental features of your solar power, utilities acquire your SRECs to comply with state-level renewable energy regulations. Depending on the state’s SREC market, selling your SRECs might result in hundreds (or even thousands) of dollars more in annual revenue.
An SREC can be valued anywhere from $5 to $450 based on availability and demand in the local market. Therefore, the value of this incentive varies greatly depending on where you reside.
Performance-Based Incentives (PBIs)
The performance-based incentive, or PBI, is another type of solar incentive that gives you a per-kilowatt-hour credit for the power your system generates.
While SRECs represent the environmental aspects of solar power, emission reductions, PBI programs give an incentive for the electricity generated directly, also known as the kilowatt-hours of production.
PBIs, unlike SRECs, are not required to be sold through a market, and incentive rates are set at the time the system is constructed. Net metering policies can be replaced or coexisted with PBIs.
Other Programs to Help You Buy Your Solar Panels
A contract in which a solar manufacturer or installer offers to lend you the money to cover the cost of the system and installation, which you then repay over time.
Many financial institutions provide financing for clean energy initiatives. These loans are frequently quite competitive since they are arranged around the acquisition of an asset. You might be eligible to deduct the interest on these loans from your taxes.
Many installers have their financing systems to assist you with your project funding.
A contract in which a solar firm promises to pay for the installation of solar panels and then charges you a monthly fee for utilizing them.
Other Incentives for Solar to Be Aware of: Favorable Laws
Solar-friendly legislation may also be considered an incentive, as solar panels provide more excellent benefits to household and business owners.
Rules of Interconnection
Simple interconnection laws can assist in lowering the initial cost of a solar power system, increasing the return on investment. Consumers are less inclined to choose solar when utilities impose onerous connection procedures with high prices.
Every kilowatt-hour delivered from a solar power system to the electrical grid is given full credit under net metering. This frequently occurs in solar-paneled homes that are unoccupied around midday because no one is using the energy.
Businesses with extensive roofs can potentially achieve excess output by installing solar panels over a broad area.
Feed-in Tariff Policy
Even without net metering, some electricity suppliers offer a feed-in tariff. The rationale is that power providers must handle the extra energy from solar panels. Hence this tariff is usually lower than the electricity price.
State Rebates and Incentives for Solar Panels
You may take advantage of federal solar programs such as the Investment Tax Credit no matter where you reside. On the other hand, States frequently offer special incentives to their inhabitants. Check out the state rebates and incentives sites to see what your state has to offer to help with the cost of going solar.
Are You Interested in Learning More About Residential Solar in Charleston?
The specialists at SuperGreen Solutions can provide you with more information about solar installation in Charleston. We are committed to helping homeowners save money while contributing to a better environment with our solar solutions.
The SuperGreen Solutions team can provide help for all of our customers’ solar energy system needs. Call us now!