The popularity of solar energy in the US is growing at an unprecedented rate. Actually, there are more than 97 gigawatts of photovoltaic capacity installed, which is able to power over 15 million homes. In fact, the number is only expected to double by 2023, meaning that solar energy is here to stay.
However, while solar energy is getting more and more popular, some homeowners are still on the fence about it. One of the most common concerns is regarding the hefty investment that they have to make to install solar panels. But that begs the question — is there any free government solar program that makes switching to solar energy more affordable? Let’s find out!
Types of Governmental Solar Programs
To encourage homeowners, governments have decided to offer financial incentives, tax credits, and rebates, making solar more accessible. As a matter of fact, these offers can help you reduce solar panel installation costs by up to 50%. And while some of them focus on providing you with money directly, others are designed to compensate you after the installation.
Federal Solar Tax Credit
The Federal Solar Tax Credit is a government program that aims to help homeowners by giving them a credit for income taxes, which lowers the tax bill. In other words, by installing solar panels, you will get a dollar-for-dollar reduction on your income tax. Currently, the government provides a 26% tax credit for systems installed between 2020 and 2022. In 2023, the residential tax credit will step down to 22%, with the program officially ending in 2024. Fortunately, qualifying for the Federal Solar Tax Credit is extremely simple, as any US citizen who owns a solar energy system is eligible for it.
Net Energy Metering
Net Energy Metering is a billing mechanism that allows consumers who generate their own electricity to export any excess solar energy back to the grid. In order to keep track of the energy that enters and leaves your home, a utility company will provide you with a net meter. For any registered surplus energy, the meter will run backward and you’ll get a kWh or monetary credit. Then, you can use your kWh credit when your solar energy system is not able to cover your home’s needs. Usually, you’ll want to use your kWh credit during cloudy days, at night, or during the winter.
However, it’s important to note that not all states have Net Energy Metering. Not only that but the specifics of the program may vary by state.
Solar Tax Exemptions
Besides the Federal Solar Tax Credit, some local governments and states offer property and sales tax exemptions to help make the switch to solar energy.
- Property Tax Exemptions: These allow homeowners to remove the added value of their panels from the valuation of their homes for tax purposes. That means that even if your property value increases due to solar panels, you will still pay the same amount of property taxes as before.
- Sales Tax Exemptions: This type of tax exemption lets you reduce the cost of your solar installation. How? By providing an exemption from the state sales tax for the purchase of residential solar energy systems. Depending on the state that you live in, these tax exemptions might also cover the storage, sales, and use of components that go into a solar energy system.
In the end, there are a variety of government solar programs that you can use to adopt solar technology faster. And while some of them might have strict requirements, others are extremely accessible. So, if you decide to give solar energy a try, make sure to check out your local government solar programs.