In order to spur the growth of renewable energy, and solar in particular, federal and state governments as well as the utility companies have established programs to issue tax credits, rebates and other incentives to purchasers of solar power. Bonterra helps each of our clients identify available incentives and even helps with the paperwork!
Federal Tax Credit
The Federal government provides an Investment Tax Credit (ITC) of 30% for the purchase of a qualifying solar system. Qualifying solar systems include solar hot water systems used for domestic water heating or space heating, photovoltaic systems, and hybrid solar lighting systems. If you have questions regarding other types of solar or have questions in terms of what other expenses may qualify for the federal tax credit, please see a comprehensive FAQ from the Solar Energy Industry Association.
The federal investment tax credit was recently extended in 2008 for a period of 8 years and all caps that were in place limiting the amounts of credits available were removed.
If a purchaser cannot claim the entire 30% tax credit in the purchase year, the credit may be carried forward to future years.
In order to claim the federal tax credit, you must submit IRS Form 5695
State Tax Credits
Like the Federal ITC, many states also offer tax credits in an effort to spur the growth of renewable applications. The tax credits differ by state , but in California, solar systems are eligible for a state rebate based on the size/production of the system. The rebates vary by system type and location so please call us to discuss specific rebates for you!
