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2011 Rebates Update: Solar
Posted on 08. Feb, 2011 by GMS Editor in Newsflash, ShowOnLatestPanel
Solar Energy Systems
What are the tax incentives for solar systems?
Homeowners are eligible for tax credits for qualified solar water heating and photovoltaic systems. Solar water heating systems produce hot water, photovoltaic systems produce electricity (including solar fans). The credits are available for systems “placed in service” at any dwelling unit, not necessarily the primary residence, between January 1, 2006 and December 31, 2016.
Note: This is a basic guide to the credit. For more detailed information, go to www.seia.org and download SEIA’s FAQs regarding the new legislation.
Who is eligible for the tax incentives?
The tax credits go to businesses that install solar equipment for their use, and to individuals who install qualifying systems on homes they use as a residence (unlike other consumer incentives, the dwelling does not have to be the taxpayer’s primary residence – second homes are eligible, although rental properties are not).
How do the incentives work?
The tax credits are for 30% of the cost of the system. For systems installed before January 1st, 2009, the maximum credit for individuals is $2000 for photovoltaic systems and $2000 for solar water heating systems. Systems installed after December 31, 2008 are not subject to a cap. To qualify, residential systems must meet certain criteria as follows:
* Solar water heating:
- System must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the state government in which the system is located. SRCC is an organization set up by the solar industry to test and certify equipment so purchasers have an independent assessment of system performance.
- At least half of the energy used by the system to heat the water must be solar energy. The credit is not available for expenses for swimming pools or hot tubs.
* Photovoltaic systems:
- System must provide electricity for the residence, and must meet applicable fire and electrical code requirements.
- This includes solar fans (the credit will cover the solar panel portion of the fan system).
What do I have to do to qualify for these incentives?
To qualify, tax payers will need to have evidence regarding:
- the cost of the system (including labor and piping or wiring to connect the system to a home’s plumbing and/or electrical systems),
- when it was placed in service,
- whether the system meets the qualifying criteria discussed above.
For taxpayers installing solar PV or water heating systems at their residence, use the Residential Energy Efficient Property Form 5695.
Learn more at The Tax Incentives Assistance Project.
