According to the DOE, you can save 5-15% on your annual heating bill.
How? By setting your thermostat to 68° F during the winter when you’re not home. But, wouldn’t it be nice to eliminate your heating bill instead? If you decide to go solar, you could.
Solar energy is on the rise. It’s helping homeowners cut down on their monthly energy bills while also saving the planet. If you’re thinking about going solar but need a little convincing, this article is for you.
Read on to learn all of the financial benefits a solar panel system has to offer.
Qualify for Clean Energy Programs
When talking about financial benefits, it helps to paint a realistic picture. At the moment, the truth is that the electricity from solar energy costs more to produce electricity from a utility company.
However, state governments and national organizations are eagerly looking for ways to encourage solar power use. The goal is to provide people with alternatives to burning precious fossil fuels.
Governments are especially motivated to promote solar power because of the threat of energy shortages. There’s also a dire need to cut down on greenhouse gas emissions.
Solar energy is proving to be a wonderful way to help decarbonize our planet! How does all of this fit into providing you with financial benefits?
As a result of the world’s eagerness to encourage solar, you’ll be able to qualify for all sorts of government programs. Certain government programs will offer tax credits or subsidies to help offset the cost of installing your solar panels. These programs are in place for commercial solar opportunities as well as residential opportunities.
To make residential solar systems a reality, the federal government passed something called the public utility regulatory policy act. The act was passed a while ago, back in 1978.
The act requires the utility companies to pay customers for any extra electricity that their solar system grid produces. This presents another money-saving opportunity!
Sell Your Excess Energy
The energy your solar system produces has a few types of value. First, there’s the electric power that you’ll get to produce. Not to mention, you’ll be producing completely clean energy, the type of power that doesn’t hurt the planet.
Earlier, we mentioned that you can sell your extra energy back to the utility company. But exactly how does that work? It all has to do with the renewable energy certificates.
Because of climate change, there are legislation mandates firmly in place. What do these mandates call for? Utilities, state and local governments, manufacturing plants, and more have to reduce their carbon emissions.
Companies also have to reduce their consumption of fossil fuels. The only way to do this is by using renewable energy sources for some of their energy needs.
Benefiting From Mandate Requirements
Any type of industry or utility company that doesn’t have access to clean energy can still buy renewable energy certificates. They’ll purchase these certificates from somebody who’s producing renewable energy. This someone could be you if you had a solar system in your home!
The electricity that the certificate represents is green power; it’s proof of going green. You’ll be profiting from helping the planet.
The entire renewable energy certificate system is highly monitored. So you don’t have to worry about double selling.
Renewable energy certificates have registrations, numbers, and tracking systems. Any of the sales for these certificates include an affidavit so that no one else can claim that unit of green energy. You can only use certificates once.
After a buyer makes their initial environmental plan to get the certificate, you can consider the certificate retired. Buyers also have to keep in mind that their certificates will retire.
Going Green and Owning It
Another part of owning solar panels is being able to own certificates in their entirety. When you own solar panels, you own all of the renewable energy certificates for all of the energy your solar system produces.
Sometimes you’ll be able to find utility companies willing to use a separate agreement. Remember, they want to sell the certificates to companies who need green power, or they need to meet green power mandates themselves.
If you decide to sell your certificates, you’ll no longer be able to claim that you’re using green power. This is just something to consider before you jump into any type of agreement.
For instance, taking into consideration Minnesota’s energy solar rewards program. It gives customers a one-time payment for installed watts of generating capacity. The Minnesota rewards program requires the participant to forfeit ownership of their renewable energy certificates for a certain number of years.
In other words, sometimes, when you start selling your energy certificates, you give the credit over to another entity. This can be fine since you’ll be making money. But if you’re a commercial organization, you might not be able to meet the green energy mandates yourself.
Residential Financial Benefits With Tax Credits
Are you thinking about going solar because you want to take advantage of the different tax credits? A tax credit is what reimburses you for part of the cost of a solar panel installation.
The credit works by reducing the amount of money you owe on your personal income tax. It’s a lot different from a tax deduction.
When you have a tax deduction, you’re going to subtract the specific itemized amount from your taxable income. A tax credit, on the other hand, subtracts from the tax you owe after all of your deductions are calculated. In other words, it’s extra money!
Tax credits will increase your tax refund, putting more money in your bank account. Or, if you owe taxes, it’ll decrease the amount you owe.
One of our favorite tax credits is the residential renewable energy tax credit. The residential renewable energy tax credit is made for homeowners. It takes the cost of installing a solar electric or solar water heating system down by quite a bit.
You could wind up saving thousands of dollars for your solar panel installation. This tax credit works for solar electric and solar water heating systems.
Closely Regulated Opportunities
The IRS closely regulates the tax credit program for the residential renewable energy tax credit. For instance, your solar system has to serve a house that exists in the USA.
The house has to be occupied by a resident that’s a taxpayer. The home, however, doesn’t have to be the taxpayer’s principal residence.
You can request credit for certain expenses, but not all. For instance, it’s okay to request the tax credit for the initial solar panel installation. This can include the equipment, labor cost, on-site preparation, and more.
You can also request credit for the piping or wiring that takes place to connect the solar system to your home. Another way to financially benefit from going solar is by cashing in on rebates.
Rebate Cash In
Rebates don’t have anything to do with your taxes. They’re completely separate.
A rebate is a way to get cashback when you make a purchase. There are all sorts of rebates available to help cut down on the cost of installing a solar system.
You can find rebates from state and local governments along with local utility companies. Sometimes manufacturers of solar equipment and solar contractors themselves will also have rebate programs.
The rebate programs are there to help lighten the energy burden. Remember, the goal here is to save the planet.
By cutting down on the use of fossil fuels and making solar more popular, we can create a brighter future. State and local rebate programs really want to help build that future.
Manufacturer Rebate Opportunities
A lot of times, manufacturers will offer rebates to encourage you to buy their solar products. After all, solar is a competitive field. Every little bit of company can do to earn your business is well worth their time.
A lot of manufacturers will be able to offer rebates as part of different government incentive programs. It’s all about encouraging the progress of solar industries.
The manufacturer’s rebate can go directly to the solar contractor you hire for your panel installation. You can pass the savings on to get a lower bill. Isn’t that crazy?
You could wind up paying less for your system just by buying it in the first place. There are also state and local programs that might hand you a check directly.
The check will be to reimburse you for part of the installation cost. These state and local programs wouldn’t apply until you’ve already paid him fully for your system.
If you’re interested in utility company rebates, we suggest visiting your utility company’s website. Find out what type of rebates they offer in the form of reducing your monthly energy bill.
Even with the solar panel system in place, you might still have some type of energy bill each month. With the utility company rebate, you could wind up eliminating your bill altogether.
Make the Smart Solar Choice
It’s clear to see that going solar comes with all sorts of financial benefits. You’ll be able to qualify for instant rebates, tax credits, and subsidies.
Since not every home qualifies for solar, now’s the time to find out if your house is a good fit. Reach out to a solar contractor and ask them to do a free solar inspection.
If you live somewhere with the right amount of sunlight, you could be cashing in on a great opportunity. Look around the rest of our website for more opportunities.