Solar Tax Credit and Rebates

The federal government has created an incentive to encourage the installation of solar panels at your home or business in the form of a solar tax credit.  This tax credit is subtracted from your federal income tax payable and is explained in more detail below.  Anyone who has purchased or is contemplating purchase of a solar energy system should consult with an account or the IRS for tax advice. The following information is provided for general information and is not tax advice:

  • For residential solar energy systems  the tax credit is 30 percent of the cost of the system.
  • There is no cap on the tax credit for solar electric systems.
  • If the system is included as part of new construction, then the spending occurs when the taxpayer takes residence of the house.
  • For business solar energy systems the tax credit is 30 percent of the cost and is also eligible for accelerated depreciation.
  • Systems must be placed in service before and December 31, 2016.
  • For tax credit forms and instructions, visit the Internal Revenue website at www.irs.gov.

(From the California Solar Energy Industry Association: at www.calseia.org/tax-credits/)

On May 2, 2013, PG& E announced the termination of the California Solar Initiative rebate of $0.20 per watt for residential solar PV installations.  The Non-Residential PV rebate program remains in effect but new Non-Residential PV installations are being placed on a waitlist.

See http://www.pge.com/en/mybusiness/save/solar/incentives/index.page?

for more information.