With the federal solar tax credit, and other
energy incentives,
the cost of installing a solar hot water heater can be reduced
by
thousands
of dollars. Federal solar tax credits were in place as early as 2005.
And with recent legislation, the credit has been extended through the
calendar year of 2016.
Other upgrades have
recently been made for both residential and commercial
applications. Overall it's safe to
say that
the U.S government, and some state governments, are encouraging private
investment in solar hot water heaters.
Tax credits
Are Dollar for Dollar
Tax
credits are claimed and filed for the previous calendar year. A tax
credit is always better than a deduction, because it reduces the total
amount of taxes you pay dollar for dollar. A tax deduction only reduces
your total taxable income before taxes are eventually
applied.
Business
solar energy tax credit
For commercial
applications there is the federal business energy investment tax
credit. Most of all the previously mentioned requirements apply,
including the fact there's no maximum dollar amount placed on
each credit.
There is one
additional provision; passive
solar water heater designs do not qualify. It's important
to note that passive systems are generally unsuitable for commercial
application due to they're relatively small storage capacity.
There are several other incentives
currently being offered. Several states are now offering solar
energy tax credits. Local governments, municipalities and even utility
companies are offering rebates, loans, sales tax and property
tax exemptions for the installation of a solar hot water
heater.
Researching several incentive programs in
your area is strongly advised. Ensure that the specific system and the
specific design your considering meets the programs requirements before
installation.
State Solar Energy Tax Credit
Many states are
now offering personal and business credits that resemble the
federal
solar tax credit. If applicable, the state tax credit can also be
combined
with the federal solar energy tax credit to recoup thousands of dollars.
The percentage of
cost that will be credited and the maximum dollar amount, if
applicable, will vary from state to state.
Sales Tax Exemption
Some U.S states
have exempted any sales tax associated with the purchase of qualified
solar hot water heaters. This means the supplier, even if
they're out of state in most cases, can't pass a sales tax onto the
consumer.
Property Tax Exemption
Installing a solar
powered water heating system will undoubtedly increase the property
value of your home or business. Some U.S states as well
as local governments have made the additional value accessed
to your home exempt from additional taxation.
Utility and Municipality Rebates
Your local
utility company or municipality may be offering cash rebates for the
purchase and installation of a solar hot water heater. In some
instances the homeowner or business owner must agree to a pre home
evaluation or a solar site evaluation.
State and Local Loan Programs
Several state and
local governments have teamed up with financial institutions to provide
low interest loans for residents who go solar. In some instances the
homeowner or business owner must agree to a solar site evaluation in
order to qualify for loan approval.
The Database
of State Incentives for
Renewables and Efficiency, or DSIRE, has an updated,
locally categorized and summarized list of such
solar incentives. The DSIRE also provides all the necessary
links and contact information needed to inquire about specific programs
and program details.
