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.
for more information.