The Solar Rebate That Is Not Officially A Rebate
To make things confusing, the current rebate for anyone buying a solar system of up to 100kW is called the STC program. Which stands for Small-scale Technology Certificate. The government says that this should not be called a solar rebate.
From the Clean Energy Regulator website:
Under the Small-scale Renewable Energy Scheme the reduction in the cost of your solar panel is not a rebate. You will not qualify for any Government-based financial recompense at the completion of any process relating to STCs.
I think what our government friends are trying to get across is that the thousands of dollars you get off your solar system price does not actually come from the government.
It is a government program, but it compels other people to buy your certificates. So it is a government run scheme, using other peoples money to provide the subsidy.
Now, you could argue that all government subsidy and incentive schemes use other peoples money!
But Im not gonna pick a fight with the Clean Energy Regulator so from now on I will try to refer to the rebate as the solar financial incentive then!
The solar rebate financial incentive subsidises the upfront cost of installing a solar power system and is not means-tested in any way. The only criteria for claiming it are:
1) Your PV system is less than 100kW in size.
2) You get it installed and designed by a Clean Energy Council accredited professional.
Solar Panel Subsidy Cost Estimation
Both central and state offer subsidy schemes to people for installing solar rooftop systems. The central government pays a 30% subsidy for these systems to states in general categories. For special states like states such as Uttarakhand, Sikkim, Himachal Pradesh, Jammu & Kashmir and Lakshadweep, subsidy of up to 70% is given by the central government.
To avail subsidy, the average cost of installation of rooftop PV system without subsidy should be around Rs 60,000 – 70,000. In order to avail generation-based incentive, the customer should generate 1100 kWh – 1500 kWh per year.
A person who is interested in getting a subsidy needs to follow some protocols. He will have to contact their electricity provider who will visit the installation site for a review and give approval. Then the electricity provider visits for inspection. Customers can then avail the subsidy amount.
Why You Should Consider Getting Quotes For Solar Sooner Rather Than Later
As mentioned above, the amount of solar rebate you can claim depends on the current market price of an STC. At a market price of $38 , the rebate is worth roughly $525 per kW installed. However, in times of high demand for solar panel installations, lots of STCs are created.
When supply of STCs increases too much, the STC price can decrease and the subsidy reduces supply and demand gotta love economics 101!
Some years back, when the government really looked like it was going to scrap the solar rebate entirely, demand for system installations caused the price of STCs to drop to $17.00.
So, if you bought a 6.6kW system today, youd be eligible for a rebate of $3,465 . However, if demand for solar panels goes up too much and the STC price drops to $17.00 again, youd only be entitled to a rebate of around $1,458 for the exact same system.
If you get 3 free quotes for solar now, youll be locking in the current rebate based on the current STC price but if you wait, the STC price could drop and significantly reduce the savings from the subsidy you can claim.
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Other Things You Should Know About The Subsidy
1) The amount of solar panel rebate you can claim depends on where you live:
The lower the number the more subsidy cash you get!
Here are some examples for the approximate STC value for a 6.6kW solar system based on a $38 STC price:
Zone 1: incentive = $4,066Zone 3: incentive = $3,466Zone 4: incentive = $2,971
2) A good solar installer will guarantee the value of your solar rebate financial incentive when you sign up for a system and handle the paperwork for you. I wrote an entire blog post explaining this process here.
And finally, if youd like to get 3 free quotes for solar and lock in the current solar panel rebate, you can do so here.
Solar Panel Rebate & Renewable Energy Subsidy Information
You can save thousands of dollars on installing solar panels if you qualify for a solar rebate, subsidy or grant.
For example, the Victorian Solar Homes program will be extended for 2019. Find out more about the program and fill out an inquiry form by visiting our Victorian Solar homes program page.
Optional: There are solar rebates and incentives available from other state governments for homes and businesses. In addition, the federal governments long-running solar incentive scheme is one of the most valuable solar subsidies currently available to all Australian households and businesses.
In addition to rebates and renewable energy certificates, find out here how your system installation could be financed and actually generate income for you with the help of the feed in tariff!
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What Is The Solar Feed
Solar feed-in tariffs are available to all South Australian residents who consume less than 160MW of power per year . You Expect to get at least 20 to 25 cents for every Kwh you send back to the grid from your PV system in Southern Australia. In case you didnt already know about them, solar feed-in tariffs are the rebates you get from your electricity company for sending your surplus solar energy back to the grid. Almost all electricity retailers in Southern Australia offer feed-in tariffs for each kW of power you send to the grid.
Solar Feed-in tariffs are the number one factor in Southern Australias green energy goals. According to the latest data published by the Clean Energy Council, over half of the energy in SA is being fed in by grid-connected household solar PV systems.
What Is A Tax Credit
A tax credit is a dollar-for-dollar reduction in the amount of income tax you would otherwise owe. For example, claiming a $1,000 federal tax credit reduces your federal income taxes due by $1,000. The federal tax credit is sometimes referred to as an Investment Tax Credit, or ITC, though is different from the ITC offered to businesses that own solar systems.
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Additional Solar Incentives And Tax Breaks By State
Other than the ITC, there are many state-based solar incentives and tax breaks. While not all states offer an incentive that applies to individuals installing solar panels on their homes, many states do. Given that the incentives for solar construction varies from state to state, looking at what incentives are available in your state is the best way to determine what incentives are available to you.
If you want to learn whether your state offers any solar incentives you qualify for, click here for a list of solar incentives and rebates organized by state.
The huge value of solar energy is becoming increasingly clear, thanks to its long-term energy savings and environmental benefits. The foremost factor dissuading most people from installing solar panels is the cost. However, given government incentives, the cost of installing solar panels is a lot less than most consumers think. If you are interested in installing solar panels, your ITC savings coupled with state-based incentives can make it an affordable option.
Getting Government Tax Credits
Federal government incentives are given in the form of tax credits. The current program in the United States will give you a 30% credit for 2019 and 26% for 2020 of the installation cost of your solar power system. You have to purchase and install the system first, and then you can apply for the credit.
In addition to federal credits, consider applying for local and state incentives. Contact your local utility company for utility incentives that you may be eligible for. Use the energy incentives database at desire.org to determine the local and state programs that you can apply for in your zip code.
To apply for a federal tax credit, fill out IRS Form 5695 and submit it with your income taxes. Form 5695 is a worksheet used to calculate the amount of tax credit you will receive. The credit amount calculated from IRS form 5695 is then entered into line 52 of IRS form 1040. Save all your receipts and the manufacturers certification statement for your records. Your solar power system must have an efficiency of 30 percent or better, and at least 50 percent of your homes energy must come from solar energy.
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Find Out If You Qualify For Texas Solar Incentives
Buy and install new rooftop panels in Texas in 2021, with or without a home battery, and qualify for the 26% federal tax credit. The residential ITC drops to 22% in 2023 and ends in 2024.6
Approximate average-sized 5-kilowatt system cost in TX: $13,109
Approximate system cost in TX after the 26% ITC in 2021: $9,70113
Weve joined forces with TXU Energy to boost the value of the solar kilowatt-hours you produce in the Lone Star State.14 TXU Energy, a Vistra Energy company, is Texass leading retail electric provider and serves more than two million customers across the state.15,16
With TXU Energys Renewable Buyback plan, you can earn Clean Energy Credits for the excess energy your Texas solar installation creates. The credits are applied to your bill when you produce more solar energy during the billing period.17 In other states, this type of arrangement is known as net metering.
Theres no cap on the credits you can earn.17 If you dont produce enough energy to power your home, like on cloudy days or at night, youll pay a simple, flat rate for 100% renewable energy from the grid thats made right in Texas. Request a free solar quote to check if you qualify.
Annual Reduction In The Solar Rebate
Currently, the calculation for your government solar rebate allows you to claim rebates on 10 years of operation. The number of years of operation will reduce by one each year up until 2030. If you plan to install solar panels in Brisbane, waiting one more year will reduce your solar rebate for a 6.6kW solar system by $333 .
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Solar Renewable Energy Certificate
A Solar Renewable Energy Certificate , sometimes referred to as a Solar Renewable Energy Credit, is another type of state-level solar incentive. After you install your solar power system and register it with the appropriate state authorities, they will track your systems energy production and periodically offer you SRECs as a benefit. You can sell your SREC to your local energy utility to provide payment thats typically considered taxable income.
How Much Does A 6kw System Cost
You can expect to pay $5,000 $9,000 to purchase and install a 6kw capacity solar system. The price provided includes a solar rebate from the federal or state government depending on where you live.
Every new solar customer is eligible to receive a rebate. Additionally, you must purchase your solar panels from an accredited installer.
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South Australian Home Battery Scheme
The South Australian rebate allows you to claim up to $3,000 off the cost of a 10kWh solar battery. This incentive is available for purchases of new hybrid systems. The amount of the rebate is $300 per kWh of battery storage unless you are an energy concession holder if so you can claim $400.
To qualify for South Australian battery rebate, your battery must be approved by the Clean Energy Council.
Solar Rebates And Incentives For Small Business
Business owners can save substantially on the price of a grid connect solar power system installation through the Solar Credits up front discount! Other incentive programs covering business situations currently include huge tax breaks, RECs and feed in tariffs.
- more information on incentives and rebates for business
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Do I Need Council Approval For A Solar System
You do not need council approval or a building permit to install a solar system in South Australia. If you are planning of taking advantage of the Subsidy for solar panels or home battery systems. you will need to have the systems installed and supplied by certified installers.
If you go for a DIY project, it will just end up costing you more money in the long run as you will not be eligible for the subsidy.
How Solar Tax Credits Work
The tax credit is a reduction in an individuals or business’s tax liability based on the cost of the solar property. Its a nonrefundable tax credit, meaning you wont get more back than the amount you owe in taxes.
Projects that begin construction in 2021 and 2022 are eligible for the 26% federal tax credit, while projects that begin construction in 2023 are eligible for a 22% tax credit. Residential tax credits drop to 0% after 2023, but commercial projects will drop to 10%.
As of 2021, the solar ITC is a 26% federal tax credit.
Homeowners who purchase a newly built home with a solar system are eligible for the ITC the year they move into the house if they own the solar system. Those who lease a solar system or who purchase electricity through a power purchase agreement are not eligible for the ITC. In this case, its the company that leases the system or offers the PPA that collects the credit.
Anyone wishing to claim the credit should first consult with a tax professional to ensure that they are eligible. It’s smart to speak with an advisor before making a major investment that you intend to claim on your taxes.
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Nsw Solar Rebates And Feed
If you live in New South Wales, the federal government solar rebate and feed-in tariffs from your electricity retailer can make solar power an attractive investment. We cover all of these incentives for you, including:
- New South Wales solar rebate
- How the rebate works
- Solar feed-in tariffs in NSW
- Solar power in NSW
- How to find the right company
How Do Other Incentives I Receive Affect The Federal Tax Credit
For current information on incentives, including incentive-specific contact information, visit the Database of State Incentives for Renewables and Efficiency website.
Rebate from My Electric Utility to Install Solar
Under most circumstances, subsidies provided by your utility to you to install a solar PV system are excluded from income taxes through an exemption in federal law. When this is the case, the utility rebate for installing solar is subtracted from your system costs before you calculate your tax credit. For example, if your solar PV system was installed before December 31, 2022, cost $18,000, and your utility gave you a one-time rebate of $1,000 for installing the system, your tax credit would be calculated as follows:
0.26 * = $4,420
Payment for Renewable Energy Certificates
When your utility, or other buyer, gives you cash or an incentive in exchange for renewable energy certificates or other environmental attributes of the electricity generated , the payment likely will be considered taxable income. If that is the case, the payment will increase your gross income, but it will not reduce the federal solar tax credit.
Rebate from My State Government
0.26 * $18,000 = $4,680
State Tax Credit
For example, the net percentage reduction for a homeowner in New York who claims both the 25% state tax credit and the 26% federal tax credit for an $18,000 system is calculated as follows, assuming a federal income tax rate of 22%:
0.26 + * = 45.5%
+ = $4,680 + $3,510 = $8,190
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Can I Still Get The Rebate If I Already Had A Battery Installed
The Rabate on solar battery storage systems is for new battery installs. The subsidy is calculated on the kilowatt-hour capacity of the battery meaning the bigger the battery, the larger the subsidy but it is capped at the same value for every household.
Low-interest loans are available to assist households to cover the purchase of the subsidized battery and new solar panels if they dont already have them.
Solar Tax Credit Eligibility
You can qualify for the ITC as long as your solar system is new or being used for the first time between January 1, 2006 and December 31, 2023. Unless Congress renews the ITC, it expires in 2024.
Other requirements include:
- You must own the system outright
- The system must be located in the United States
- The system must be located at your primary or secondary U.S. residence or for an off-site community solar project
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Solar Rebates And Financial Incentives In 2021
We at Modernize have reported on what solar panel system installations look like in states ranging from Arizona and California to Massachusetts and New Jersey. Check the DSIRE database for your own state to see whats in store for you .
To prepare you for some research, lets take a look at some examples to familiarize you with the best way to assess these credits and rebates and apply them to your own financial situation.
Stc Savings Will Depend On Your Location
“The number of STCs your system or panel is worth also varies based on where you live,” says Chris.
“Simply put, a solar system installed on a house in a place like Darwin, Brisbane or Cairns will receive more sunlight and therefore generate more power than a system installed in Hobart. So people with the system that generates more power will receive more of a reward in the form of a higher-value STC. It is only a few dollars though so doesn’t make a huge difference.”
We’ve found that quotes from different installers can vary significantly. As well as understanding the rebate part of the quote, you should also consider the technology used, the brands of components used and the reputation of the installer.
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