Tax Credits & Rebates
Every American taxpayer is eligible for a 30% federal Investment Tax Credit (ITC) available for new solar installations. Tax treatment varies based on how the property is used. “Dwelling units” including homes, apartments, condos and other types of property where people live, are not taxed on any subsidies they may receive from their state or utility, and receive the 30% ITC based on the cost of the system less the aforementioned subsidies. Owners of non-dwelling properties (including hotels and motels, industrial facilities, office buildings, retail facilities, agricultural facilities, etc.) are taxed on the value of the subsidies they receive from state entities or from utilities, but are able to claim the 30% ITC on the total cost of the system. All investment properties, regardless of usage, are able to depreciate the cost of the capital investment on an accelerated basis, meaning that a solar investment is almost always heavily tax advantaged for business owners.
Many power companies and state governments in 38 states across the country offer rebates to install solar energy. Some incentives are better than others. Ask us if incentives in your location make a solar investment financially attractive.
In Colorado, continuing rebate programs are operated by Xcel Energy, Black Hills Energy, Holy Cross, Aspen Municipal, Pepco and Colorado Springs Municipal. Other power companies offer limited budget programs which are often matched by the Governor's Energy Office.
Rebate programs plus the federal ITC can make photovoltaic systems very affordable. We can carry the rebate for all installations, and we can also carry the ITC for business installations. These financing options frequently mean that your out-of-pocket cost can be substantially lower than the total system price.
Given the level of incentives offered in many locations across the country, it is not unusual to see commercial installations that break even in three years or less, returning better than 30% annualized over the warranted life of the system after taxes. Residential systems can often break even in as little as seven years.
Colorado Power Companies Must Pay Retail for Power Generated On-Site
With a photovoltaic system you are selling the electricity you produce to your power company directly through the same meter you use to buy from the grid. Your utility will install a new Net Meter that runs backwards, recording the kWh you are generating to offset your usage, purchasing what you produce for the same price they charge you. Produce the same as you use and you zero out your bill. If you produce more electricity than you use, your energy company will pay you wholesale for the excess wattage you produce, up to a legal limit of 120% of your actual energy needs in the State of Colorado.
We will work with you to design your ideal solar PV system, keeping in mind three key considerations: your energy offset goal, your budget and available space with adequate solar access.
Ask us for more information regarding the rebate and tax credit programs. Then be sure to consult with your own tax professional.