SOLAR Incentives

The California Energy Commission (CEC) has recently met and voted to increase the Solar Energy fund to more than $3.2 billion for the next few years to incentivise the use of solar energy. What this means to you, the consumer, is that your solar system will be paid for, up to 33% by already allotted funds, available from the CEC.

There is also a Solar Energy Tax Credit available from the state of Califonria. It has not yet been renewed for 2006-2008 but is expected to be extended to coincide with the new $3.2billion incentive package just approved (above).

SOLARIS PV will help you decide which CEC rebate best fits your installation, and complete all of the required paperwork for that program and submit it for you, then help you get your rebate once your system is installed.

The Energy Policy Act of 2005 (H.R. 6) establishes a 30% tax credit up to $2,000 for the purchase and installation of residential photovoltaic (solar electric) and solar water heating property. An individual can take both a 30% credit up to the $2,000 cap for a photovoltaics system and a 30% credit up to a separate $2,000 cap for a solar water heating system. A 30% tax credit up to $500 per 0.5 kW is also available for fuels cells.

Solar water heating property must be certified for performance by the Solar Rating Certification Corporation or a comparable entity endorsed by the government of the State in which the property is installed. Note that the tax credit does not apply to solar water heating property for swimming pools or hot tubs.

The credit is calculated based on the individual’s expenditures excluding subsidized energy financing, which is defined as "financing provided under a Federal, State, or local program a principal purpose of which is to provide subsidized financing for projects designed to conserve or produce energy." Consumers who receive other incentives are advised to consult with a tax professional regarding how to calculate this federal tax credit.

If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. Expenditures include labor costs for the onsite preparation, assembly, or original installation of the system and for piping or wiring to interconnect the system to the dwelling.

To be eligible for the credit, a system must be "placed in service" or activated between January 1, 2006, and December 31, 2007. Expenditures with respect to the equipment are treated as made when the installation is completed. This provision is particularly important for expenditures made before 2006 for projects not "placed in service" until 2006. If the installation is on a new home, the "placed in service" date is the date of occupancy by the homeowner. The IRS will be issuing further guidance on claiming this credit.

The appreciation of equity in a home is one of the easiest and most successful paths to wealth that is available to you. To a large degree, it is almost painless--you make the mortgage payment that you would have to make anyhow and the balance is reduced. The value of the home, meanwhile, is rising. Every month, then, your nest-egg should be growing. The quicker you find yourself at 100% equity--owing nothing on your home--the quicker the route to a comfortable (or early) retirement, to less financial stress, to true (as opposed to fake) wealth.

When you improve the quality or size of your home, you also increase its value and thus your equity. Be aware, though, that although virtually all home improvement projects will bring some return, some are much more advantageous than others. For example, remodeling kitchens or bathrooms traditionally have brought a greater return than adding leisure amenities such as pools or whirlpools. To get the maximum equity enhancement, make certain that the kind of improvements you are looking to do will raise the value appreciably. In the new millennium, a new home improvement has come to the fore that will increase equity substantially; adding solar electric (solar pv) to your home. Solar energy used to be considered a fad by appraisers in the late 1970s and 1980s; this was mostly due to the bulk (95%) of the solar installations consisting of solar hot water (life span of about 10 yrs max) and not solar electricity. In some circumstances because of the liability of having to replace the (failing or ready-to-fail) solar hot water system an appraiser would deduct from the value of the home. This is no longer the case with solar electric. Solar electric installations typically last up to 30 years and are typically warranted up to 25 years, this, coupled with the continually rising high cost of electricity makes this appliance added to your home VERY desirable.

A rule of thumb, according to the Real Estate Appraisal Institute, is to add one half (½) the cost of the solar installation to the current value (equity) of your home prior to pricing it for the market.