The federal government provides solar rebates for two different technologies: solar electricity and solar water heaters. These systems work differently and play different roles in the operation of a house. Either one might be appealing to someone trying to reduce their use of fossil fuels and to create savings for themselves in the long run.
Reimbursements for solar electricity are generous. Any device that uses solar energy to create electricity for a house qualifies for the tax credit, and installation expenses are included in the total cost. Necessary adjustments to the building also count towards the credit.
For example, a medium-sized independent solar system costs $52,000; of this amount, the government would reimburse $15,600. (Of course, the proud owner of the new system will also automatically gain solar energy savings.)
There are no special restrictions (such as an Energy Star rating) on technologies used to qualify for this tax credit. From the government’s perspective, all contributions to solar electricity are worthwhile. Naturally, the systems must comply with existing fire and electricity codes.
Solar Water Heaters
Another way to qualify for a solar rebate is to install a solar water heater. These systems can be installed in many different permutations. The two main components of a solar water heating system are its collector and its circulation system. There are two important decisions to make about the circulation system:
What fluid moves the heat? In direct systems, the house’s water supply passes directly through the solar collector. In indirect systems, heat is absorbed by a different fluid, which transfers heat to the water in a separate location.
What power moves the fluid? In passive systems, the fluid moves on its own through the power of convection. In active systems, a separate source of electricity is required to transport the fluid up to the collector.
To qualify for the solar rebate, a system must use the sun for more than 50% of its thermal energy. The thermal energy produced by an active system must therefore exceed the electrical energy required to operate it.
The actual evaluation of solar power is made by a body called the Solar Rating and Certification Corporation (SRCC). An Energy Star rating from the government requires prior certification by the SRCC—and the solar rebate requires an Energy Star rating. The Department of Energy has a list of solar water heaters that receive an Energy Star and therefore qualify for the tax credit.
About the Credit
As per recent legislation, taxpayers are entitled to 30% of the cost of installing a solar power system. This credit counts against their taxes for the year in which the energy system went into effect.
In addition to these two federal credits, many states and cities offer solar rebates. Twenty-one different states offer incentives for solar power. Even more offer direct cash incentives.