Learn Why There Has Never Been a Better Time to Go Solar for Less
“Unless we practice conservation, those who come after us will have to pay the price of misery, degradation, and failure for the progress and prosperity of our day.”Gifford Pinchot
* I am not a financial advisor or accountant. Please consult your financial professional and accountant for the most up to date financial information regarding available solar tax credits and government incentives. Information and policy change all the time and only a certified financial professional can give you accurate, timely advice. I wrote this book for entertainment and informative purposes only, and am not responsible for any financial decisions you make because of information in this post. *
Why There Has Never Been a Better Time to Go Solar
Right now there is massive push at the government and state level to encourage consumers to consider their environmental impact. From tax incentives to outright grants, consumers are being incentives to make better choices for their communities and the planet. As with many government programs, what begins as incentives for early adopters soon becomes mandates that no longer have the financial help to consumers. Let’s talk about a few of the current programs the government has in place to help people make the switch to clean renewable energy.
Federal Income Tax Credit
First off is the Federal Income Tax Credit, which at present offers a 30% tax credit for residential solar panel installations recently received a 10 year extension from congress. The tax credit is designed to help owners battle the runaway inflation and ever rising energy costs we face in America. In 2022, this means that you will owe 30% of the total project costs less in taxes the following year. So let’s say the total system cost is $30,000 in 2022. You would then receive a tax credit for $9,000. Now this tax credit will work for most people, unless you’re retired or not earning enough money to benefit from the full tax credit. That is something you need to consider while reviewing any solar proposals. Once again, I want to reiterate that you should consult your accountant and discuss how any incentives could affect your particular situation. At present, this tax credit applies to your federal income tax liability. They can roll it over multiple years to help you maximize your savings from your solar investment.
Where can I find information on available incentives for converting to solar?
Check out the links on the bottom of jonnelsen.com under Homeowner Resources where I have several links to available incentives no matter where in the US you live.
Are There Any Incentives Available?
Incentives whether at the national level, regional level, or state level can also help reduce the cost of solar. There is no guarantee that there are available incentives but everyone should always do research into any potential savings. The following websites can provide valuable resources to potential tax savings:
- US Department of Energy (energy.gov): Here you can read articles about ways to reduce your electric bill as well as information about potential renewable energy sources. While this book focuses on solar production, there are numerous other ways to produce power that the average homeowner might consider. At the top of the page there is a simple search bar that can provide information about things like “Clean Energy Tax Credits”.
- N.C. Clean Energy Technology Center at N.C. State University (dsireusa.org): DSIRE allows you to search by zip code and discover any potential incentives available in your region or state. This is the most comprehensive list available, but you will need to thoroughly read each incentive for potential viability. Some incentives are for corporations, specials groups or certain states. There are tax credits, loan programs, grant programs and rebates all listed and organized. If you apply a filter to the search criteria you can ensure that what you see meets your unique situation.
Laws Are Changing and States Are Beginning to Mandate Solar in New Construction Projects
Right now progressive states like California are mandating the use of solar panels in new home construction, and advocacy groups are pushing to make this a requirement in many new states as well. Early adopters can take advantage of the incentives, but unfortunately, those who wait may lose incentives available today and be forced to change. Rather than wait for a mandate, why not get ahead of proposed changes and benefit from not only the savings of going solar but also the incentives currently available? The fact is that many households will go solar over the next decade. It’s just a matter of when and how soon you can become energy independent and save money each month on your electric.
SREC - Solar Renewable Energy Certificates
Many states have Solar Renewable Energy Certificates or SREC for short. These are state driven incentives to allow producers of solar energy, such as you the homeowner, to profit from the energy you produce. Many states require utilities to produce a certain amount of energy from renewable sources such as solar and thus to meet the threshold of energy production, they will buy the rights to count your production as their own. This does not mean that the homeowner cannot use that energy for themselves. It simply means that the utility company will pay you to say that they purchased renewable energy that you’re producing.
SREC’s are a great way for homeowners to earn additional income from their system every year. Let’s say a homeowner has a 10 Kilowatt system that powers their home, that is equal to around 10 Renewable Energy Certificates and a state like New Jersey might pay up over $200 per credit on a marketplace like srectrade.com. So besides all the benefits of solar that you receive and we have discussed, in some states you can receive enough income through credits that it almost pays your entire yearly cost of energy production. Currently, 7 states have SREC programs: New Jersey, Massachusetts, Pennsylvania, Maryland, Washington D.C., Delaware, and Ohio. If you live in one of these states, investigate how much additional income you can earn from your system’s production.
Here is an average of each state’s SREC in 2022:
• New Jersey - $234
• Massachusetts - $289
• Pennsylvania - $40
• Maryland - $79
• Washington D.C. - $400
• Delaware - $400
• Ohio - $6
So if you live in any of those states and are considering solar, ask your representative about how to maximize your earnings with these credits. As a homeowner, take the time to educate yourself on all avenues of savings so you can fully take advantage of the amazing opportunities the solar market has for you and your families finances.
Energy Costs are Rising Rapidly
As I write this book right now, Russia has undertaken a war with Ukraine that has sent energy prices and inflation to record heights. While we rarely pay close enough attention to our energy bill, when we finally look at the costs, it’s easy to spot how quickly it has gone up. Also, many of the energy fees we see on our bill are beyond our control and we have no way of knowing what they might charge for next. For instance, households in California are often surprised to see that they pay decommissioning costs for nuclear power plants that no longer generate energy. It would surprise households in many western states to learn that they are helping to pay for wildfires that resulted from mismanagement of utility companies they currently receive energy from.
The beauty of generating clean renewable solar energy from a power plant on your own rooftop is that you can lock in your rate without having to worry about large jumps in your bill based on the whims of utility monopolies. But rather than focus on the energy bill you might not be as familiar with, let’s look at an energy cost everyone pays close attention to. Let’s look at the price of gasoline and how it’s increased over the years.
If you had a time machine and could go back and lock in the price of gasoline for virtually your lifetime would you?
Solar energy is one of the few ways you can protect yourself against inflation and rises in energy costs. While the world is at risk of rising energy prices because of corporate greed or geopolitical decisions, you can now insulate your family from those worries. It’s just one more way you can help have a bit more control over a changing world and the issues facing it. Utility companies are for-profit companies that answer to shareholders and large pension funds that expect to see a return on their investment year after year. One way these energy monopolies continue to be such attractive investments for hedge funds is by continuously raising prices and adding new fees. So if the only direction these prices seem to go is up, why not lock in a better rate today and take yourself out of the utility monopoly hamster wheel?
Let's discuss your energy goals and find out if solar makes sense for you with a short virtual meeting.
- Solar for $0 down
- Save up to 50% on your energy bills
- Increase your home value
- Get clean renewable energy
- Get a 30-year warranty
- Customized proposal and best value
Let's talk about going solar!
Jon Nelsen | Solar Consultant