Energy Tax Incentives for Installing a Solar Roof
Federal Tax Credits
The federal government offers a number of solar incentives, including a 30% Federal Solar Tax Credit on the solar system cost.
Renewable Energy Credits
Renewable Energy Credits (RECs) are tradable commodities that were developed to place a value on clean, renewable sources of energy. These credits can be sold in compliance markets to utility companies who need to meet mandated renewable energy standards or the credits may be sold in voluntary markets to organizations who wish to meet renewable energy goals. As a producer of solar energy, you will be credited with one REC for every 1,000 kWh (1 MWh) of electricity you produce.
Solar Hot Water Tax Credits
You may be eligible for a tax credit of 30% for a solar water heating system. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is on a new home, the “placed in service” date is the date of occupancy by the homeowner.
Eligible expenditures include labor costs for onsite preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home.
There is no maximum credit for solar water and space heating systems, but the systems must be placed in service before December 31, 2016. The equipment must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed. At least half the energy used to heat the dwelling’s water must be from solar in order for the solar water-heating property expenditures to be eligible. The tax credit does not apply to solar water-heating property for swimming pools or hot tubs. The home served by the system does not have to be the taxpayer’s principal residence.
State and Local Rebate Programs
The state of California, along with many cities and utility companies have created programs to encourage homeowners to switch to solar power. The state’s California Solar Initiative (CSI) has a goal of installing one million solar roofs in California by 2018. The amount of the rebate subsidy varies by program. Roofmax will identify all of the qualifying programs for your business and file the required paperwork for you.