Requirements for a Solar Panel Federal Tax Credit
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|Installations of Solar Water Heaters Worldwide|
Solar panels, also called photovoltaic systems, must provide electricity for your home--not just for a swimming pool or hot tub--in order to qualify for a federal tax credit. Like solar water heaters, they must also meet all fire and electrical code requirements for your area. Improvements may be on an existing home or for new construction. The full cost of the solar water heating system, including labor or installation fees, is used in figuring your tax credit.
Requirements for Solar Water Heater Federal Tax Credit
To qualify as a tax credit, your solar water heater system must generate at least half of its energy from the sun. The system must either be certified by the Solar Rating and Certification Corporation or a similar organization which your state endorses. The water being heated by your solar system must be used within the dwelling--not just for warming a swimming pool or hot tub. The photovoltaic system must pass all fire and electrical code requirements. According to the Energy Star website, if the system is an All Energy Star Qualified solar water heater, it qualifies for the tax credit. To get your tax credit, file IRS Form 5695 when you file your tax returns.
State Grants for Solar Power
While residents of all 50 states qualify for the federal tax credits, according to CalFinder.com only a fraction of the states offer grants for solar power home projects. CalFinder website names nine states and provides links to their grant programs including: Colorado, Minnesota, Montana, New York, Ohio, Pennsylvania, Rhode Island, Vermont and Washington state. In addition, Solar Power Rocks website has a search system allowing homeowners to search for solar rebates, tax credits and incentives in their home state as well as the state of their vacation home.
Government/Utility Company Incentives
Many utility companies work in conjunction with federal, state and county tax refunds and incentive programs which help make solar more affordable. The utility company can hook your solar system up to the nation's power grid and direct the excess power generated by your solar system to other households. Sacramento Municipal Utility District (SMUD) is one such example. Sacramento residents may use SMUD's online Clean Power Estimator to analyze the feasibility of installing solar with all available federal, state and local incentives. Check with your area's utility company for similar programs.
•Energy Star; Frequent Questions: Is there a tax credit for solar water heaters?
•CalFinder.com: Which States Offer Government Grants for Home Solar Power?
•Solar Power Rocks; Michigan State Solar Power Rebates, Tax Credits, and Incentives; January 2010
•Sacramento Municipal Utility District: Clean Power Estimator
•NJ.com; More N.J. Homeowners Invest in Rooftop Solar Systems... ; October 2009
•Electricity Science and Solutions for Solar; Government Solar Programs Offer... ; January 2011
•Go Solar California; The California Solar Initiative - CSI
•City of Roseville California: Solar Rebates
•Go Solar California; Solar Incentive Programs by Utility