Incentives for Solar and Renewables

As noted in the last article, solar can be complicated. You can install it directly on your property, buy panels as part of a larger system, or purchase a subscription to a community solar program. Options and benefits could differ depending on the state though, so today, we’re going to talk about different renewable energy opportunities around the country.

Sometimes people assume that solar power is only viable in the sunniest parts of our country - California, the southwest, Hawaii, Texas, Florida. While solar radiation is certainly stronger in these areas, there is enough sun shining everywhere to make solar possible around the country. The Climate Reality Project found that solar panels will even work when it’s cloudy. Rather than determining whether a location is sunny enough, how state policies address renewable energy is increasingly important to determine if solar is a good option for a building.

States can offer different tax incentives which make solar installations more financially feasible in some areas. For example, a state can exempt solar installations from property taxes, waive the sales tax on solar equipment, or give an individual tax deduction for purchasing and installing solar systems. The federal government also provides tax credits for various forms of renewable energy and energy efficiency. For solar power, ENERGY STAR lists credit opportunities for solar water heating and solar panels. These could change from year to year though, so it’s always a good idea to check what’s most recent.

Some states require utilities to meet renewable energy production thresholds by a certain time (in Illinois, utilities must prove 25% of their energy is from renewable sources by 2025; in California, electric utilities need to source 60% renewable energy by 2030, and all electricity should come from carbon-free sources by 2045). To meet these requirements, utilities can promote renewable energy projects, support community solar, or buy renewable energy certificates (RECs) from individuals or companies who own their own renewable energy installations (like solar arrays).

Net metering is one strategy used to provide the financial benefits of solar to customers. When a customer produces more solar power during the day than is needed to cover their own electric usage, net metering allows the excess power to be fed back into the electric grid and then credited to a customer’s account. The credit is then subtracted from the total kWh used from the grid during times when the solar panels are not producing enough electricity for the building’s needs. Net metering policies may make solar a more attractive option in certain states; utilities may give full value credit to customers, whereas others may only give partial credit, depending on the state.

Check out the Database of State Incentives for Renewables & Efficiency (DSIRE) for more information about the incentives available in a particular state. Additionally, if you’re not sure how solar would impact your utility bill, contact the team at Fusebox for insight.

Check out Laurel’s other blog posts!