Grants and Incentives for Solar Panels
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Perhaps the biggest myth about solar energy is that it is too expensive. The reality is that solar energy is more affordable than ever. In fact, according to the Solar Energy Industries Association (SEIA), the cost of solar panels is down 70% since 2009. But it is more than just low cost that makes the investment of solar energy affordable. Federal, state and local grants and incentives help to reduce the upfront cost of installation as well. Maryland solar incentives are considered to be among the top of the table.
On the Federal level, incentives for solar energy were introduced as part of the American Recovery and Reinvestment Act 2009. Customers who go solar receive a tax credit equal to 30% of the cost of installation for renewable energy systems, including solar electric, solar hot water, and photovoltaic solar panel systems. The best part? There is no cap to the credit, so residents receive the full 30% credit no matter how large or small the installation.
While everyone is eligible for Federal tax incentives, states and local incentives vary a great deal. In fact, incentives don’t just come from the government. Local utilities offer rebates and incentives for switching to renewable energy. Incentives also vary in form, whether they be tax deductions, rebates or grants.
Solar incentives and grants change regularly and are different for every location. If you want a comprehensive look at what benefits might be available to you, then you might consider scheduling a free solar analysis, where one of Solar Energy World’s representatives can go over all your options in specific detail.
Energy Summit: What’s next in the Maryland energy future? (part 7)
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One thing is certain – Maryland is in a better place than we were just a few short years ago.
Commercial solar and residential solar continue to make large strides.
Maryland homeowners are sharing the investment benefits with neighbors and colleagues, while more events like the Wind & Solar Expo are becoming commonplace. Yet, there is still a goal in front of us to hit the 6% solar carve out.
Federal grants and bonus depreciation have helped boost commercial solar installations across the US. Today’s workplace now include discussions of energy conservation and “green teams” are being formed.
Right now, there are 1,200 jobs created in Maryland due to the solar industry. And that number is expected to rise.
The Wind Energy Act is work in progress. The state has established a inter-agency State/Federal task force to advise US Department of Interior on offshore wind leasing. And, the state as entered into a formal partnership with the newly created Atlantic Offshore Wind Consortium to coordinate the development of offshore wind energy production on the Atlantic coast. http://www.gov.state.md.us/pressreleases/100608.asp
To wrap up all these posts, the 20% from renewable resources by 2020 is a goal that is readily achievable with today’s technology.
Maryland has also made large strides in energy conservation. Technologies are available now to reduce demand nationally by 20-30% over the next decade. Innovations in energy efficiency should allow us to keep demand constant after 2020, even as the population grows.
In our next post, we’ll connect you to useful links that help drive change in Maryland.
Reviewing solar tax rebates
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In 2009, Congress passed The American Recovery and Reinvestment Act to extend consumer tax incentives started by the 2005 Energy Act. That equals big tax rebates for you when you choose to invest in sustainable energy home improvements.
So how big are these rebates? Homeowners who invest in solar energy systems will receive a 30% federal tax credit as long as the systems are in place by the end of 2016.
In Maryland, several counties offer property tax credits. Howard County, for example, allows a tax credit that is 50% of the eligible costs up to $5,000 for electricity generating or heat generating systems, and $1,500 for a hot water supply system.
Daunted by the idea of the paperwork and details that go into claiming those tax credits? Don’t be.
We will do all of it for you. Contact us to learn more!
Please note, this post was written prior to the change in the Howard County Property Tax.
“There is so much information! How can I choose the best system for my home?”
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The easiest way to choose the right system for your home is to let us do the work! You can schedule an appointment to learn more about solar energy panels, solar hot water heating systems, and rebates and incentives. We’ll make sure that you understand how various systems can benefit you and increase savings.
You’ll want to contact your energy company to determine your average kilowatt hour usage for the past year. Once you have this information, it helps in choosing a solar system that will eliminate your energy usage.
Once we’ve provided you with a free cost/benefit analysis and you’re ready to move forward, we’ll send our technician to your home to confirm the measurements and energy savings.
We understand that all of the rebates and incentives can be confusing, so we’ll complete the tax credit and rebate paperwork to ensure that you’re getting all the financial support that is available.
The installation is usually complete within 2-3 days depending on the size of your system. Once your system is installed, we set up the final inspection with the appropriate municipality and/or utility company. Then we make sure you’re connected to the grid so you can start receiving the rewards for going solar.
We’ll complete the final paperwork for the appropriate Renewable Energy Credits (SRECs) so you’ll start seeing savings and earnings immediately!
There must be some disadvantages to solar energy. What are they?
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While we’ve noted the numerous advantages of solar energy, it is only responsible to note some of the disadvantages, as well.
- Initial cost of installation: Solar energy systems can be costly to install at first, but with various grants and incentives available, that cost can be greatly reduced.
- Larger space required: Because of the equipment associated with solar energy, smaller residential and commercial spaces may be limited in solar opportunities.
- Solar energy requires light: While this is true, the light required for solar energy does not need to be direct. Consumers can also install solar thermal systems that are powered by heat.
- Pollution can impact solar panels: Unfortunately, pollutants in the air can have an effect on solar energy panels. The blockage caused by pollution prevents optimal light from reaching the panels.
Like all energy systems, solar energy does have disadvantages, but the many advantages that we’ve noted so far usually outweigh these points. We are happy to discuss incentives to lessen initial costs and panel placement to ensure optimal light.
The true cost of solar panels
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When calculating the cost of solar panels, it’s important to consider more than just the sticker price. While the initial installation may seem like a lot of up-front costs, the cost-savings over the life of the solar panels and incentives available can help to off-set the investment.
You can calculate an approximate savings with our Solar Savings Calculator. Let’s say you pay an average of $300/month in utilities, would like to offset that cost by 25 percent. You live in Anne Arundel County in Maryland, and your house is oriented toward the south. You would ultimately save almost $19,000 in incentives, including utility costs, Federal and property tax credits, and state grants.
Incentives include:
- Residential renewable energy tax credits: 30% tax credit for residential solar energy systems installed before December 31, 2016
- Washington DC renewable energy incentive program: 1kW+ systems qualify for $1-3 incentives on solar and wind energy systems
- Maryland solar energy grant program: Solar photovoltaic systems under 20kW earn grants from $0.35-1.25/Watt. Solar hot water installation receives 30% of the installed cost up to a $2,000 maximum grant
- Maryland county property tax credits: Various tax credits available in Anne Arundel, Harford, Howard, Montgomery, and Prince George’s counties
- New Jersey renewable energy rebate program: Solar photovoltaic systems under 10,000 watts earn grants of $0.75/watt for systems up to 7.5kW.
Why Solar Can (and Should) Be for Everyone
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It used to be that only the wealthiest of the wealthy were able to install solar panels. Systems were expensive, the technology was not as mature, and there were fewer financial incentives to defray the cost.
Not so today. According to a Science Daily article from March of last year, the price of solar panel systems steadily declined from 1998 to 2007. Three important pieces of federal legislation have provided for continued financial incentives, opening the doors for more home owners to install solar power.
Moreover, solar technology has vastly improved over the decades. Like computers, the cost of solar panels has dropped in relation to their increased efficiency. As a result of improved technology and more tax credits and other financial incentives from federal, state and local governments, the overall cost of solar panels has become more affordable than ever.
Unfortunately, most home owners don’t realize this. It’s a common misperception that solar panel systems are expensive, and not worth the cost. That’s understandable, considering how expensive they have been in the past. But that’s the past. It’s time to live in the present. It’s time to find out how affordable solar power really is.
Four Reasons Why Building Your Own Solar Panels Is a BAD Idea
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If you Google solar panels, most of the top results are for websites selling DIY solar panel kits. The same search on YouTube is filled with videos on making your own solar panels.
While building and installing your own solar panels might seem like a good way to save some money, there are several reasons why doing it yourself is a bad—sometimes even dangerous—idea. Here are five reasons why you should work with a professional solar panel installer:
1) You will pay more for materials.
Professional solar panel installers are able to obtain a higher quality product at a lower price. The panels you get at Home Depot or other online retailers are, to say the least, a much lower quality. They are less efficient and will generate less electricity, meaning that you will have to install more panels to generate the same amount of energy, which will ultimately cost you more than a high-quality solar panel you get from a professional company.
2) Doing your own electrical can be dangerous.
This might seem obvious to some, but you’d be surprised how many people think that can do their own electrical work without having any formal training. Unless you are an electrician, installing your own electrical devices, much less a set of solar panels, can be incredibly dangerous. A professional installer will have both roofing and electrical experience, and will know how to safely install your solar panels.
3) Protecting your purchase through the warranty
Companies can be picky about their warranty. If you install your own solar panels, even the smallest mistake can void your warranty. Then you’re stuck with a system that might not be working right, has no warranty protection, and still cost you some money to install while not generating any income.
4) Paperwork, Paperwork, Paperwork
It’s great to use green solar technology and do your part to improve the environment and reduce our dependence on oil. But there’s also a financial benefit, with federal, state and local solar tax credits and grants, not to mention getting Solar Renewable Energy Credits (SRECs).
Obtaining those tax credits, grants and SRECs can be a bureaucratic nightmare. There are numerous forms to fill out, certifications to be obtained, and other hurdles that the homeowner might have to jump through. And if you make a mistake on any of your forms, you have to start all over from the beginning. Doing all this yourself can add months—sometimes years—to the time it takes for you to see a financial benefit of your solar panel system.
A professional solar installer can help you get every single cent you deserve from your solar panels, while installing a higher quality product safely.
We don’t like to brag too much (after all, this blog is about more than our company), but here at Solar Energy World, we take pride in helping our customers through every step of the solar installation process. From the first free solar analysis, through the installation and inspection, to the processing of paperwork, we provide customers with a seamless experience that makes switching to solar easier.
Far easier than doing it yourself.
Back to Basics: Solar Tax Rebates and Grants
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One of the factors that make solar energy panels affordable today are the widespread availability of solar tax rebates and grants. These financial incentives provide a significant amount of money to people who install solar panels, and can be used to cover a large portion of the costs.
There are basically three sources of solar tax rebates: federal, state and local. The federal government offers a variety of tax credits that you may qualify for when you install solar panels. Programs such as the Residential Renewable Energy Tax Credit can provide a tax credit of up to 30 percent for systems placed into service before December 31, 2016.
Here in Maryland, there are two different types of grants that you can receive based on the type of system you install. If you install a solar thermal system (also known as solar hot water), you can receive a grant for up to 30 percent of the cost up to a maximum of $2,000. If you install a solar photovoltaic system, the size of the grant you can receive is based on the size of the system you install. According to the Maryland Energy Administration, there are three different grant levels:
- $1.25/ watt for the first 2,000 watts of capacity
- $0.75/ watt for watts 2,001 – 8,000
- $0.25/ watt for watts 8,001 – 20,000
Your system must be under 20kW to be eligible; maximum grant amount is $10,000.
(Please note, as of August 23, 2010 the Maryland Grant Program has changed – the grant shown above are the old grant levels. To learn more about the updated grant visit our Incentives & Rebates page)
Locally, tax credits vary widely from county to county. Here in Maryland, only residents of Anne Arundel County, Harford County, Howard County, Montgomery County and Prince Georges County can receive some form of tax credit for installing solar panels. Check out this page on the Maryland Energy Administration’s website for a quick summary of each county’s program as well as links to more specific information.
When you add up all these tax credits and grants, you could install a solar panel system for about half of the initial cost. And that doesn’t even include the money you receive from Solar Renewable Energy Credits (more on those in a later post).
Want to estimate how much you’ll save by installing solar power? Check out our Solar Savings Calculator!