As solar technology becomes increasingly prevalent the government has put a number of measures in place that aim to increase uptake. Solar incentives offer those with residential solar energy system, (as well as businesses and industrial parks) primarily those with photovoltaic (PV) systems though many schemes do also apply to other energy efficient technologies, with the opportunity to claim money back for having the technology installed. The aim is to encourage people to install renewable technologies and these benefits can take a number of different forms. In many cases they are unique to the state in which the system has been installed, however residential systems may fall under the banner of the Residential Renewable Energy Tax Credit in one form or another. Their aim is to provide an additional reason for domestic, business and other installations beyond the usual benefits of cleaner energy and lower overall bills. As such, they are an important factor in the continued growth of the solar industry and will play a large part in helping the country reach its carbon emissions targets.

The Residential Renewable Energy Tax Credit

This is a piece of legislation that essentially acts as a federal tax credit for residential properties that have renewable energy technologies installed. Solar is covered by this legislation, which lays out the guidelines for the payments that can be made to homeowners in addition to laying out the conditions that must be met to be eligible for the tax credit. The legislation previously placed a $2,000 limit on the amount of money that could be claimed back from a solar energy system installation. However an extension of the act in 2008 removed this limit, with additional extensions removing the limit for a range of other renewable technologies. At its base the legislation enables the taxpayer to claim a credit for 30% of the expenditure they incur as a result of owning the system. More information about the legislation can be found at the website. The basic conditions for eligibility include the following for solar PV systems:

• The system must be installed by a fully licensed Photovoltaic System Installer.
• The system will need to have been in service between January 1st 2006 and December 31st 2016. Systems installed earlier than this period are not eligible and it is likely that systems installed afterwards will be subject to new legislation.
• The system must be installed in a residential property, but this does not need to be the taxpayer’s main residence.

Besides to this there are also a number of state-wide incentives that can be applied. These will differ from state to state and many include different arrangements for businesses and schools in addition to homeowners.

Types of Incentives

In most cases the plans offered will fall under one of two categories:

One Time Payments – This will be a single payment based on the conditions of the legislation in the state. Payments will usually take the form of a tax credit or rebate. Payments Based On Energy Generated – As implied, these payments will be conditional on the energy that is generated by the system. Feed-in Tariffs are an example of such a system, wherein the system owner will enter into a contract to receive a payment for any generated energy. Other types are available in some states, however these are the two main payment systems that most follow. Depending on the state, they can apply to any or all of the following: • Residential Properties • Businesses • Industrial Properties • Schools More information can be found at the Database of State Incentives for Renewables and Efficiency (DSIRE) website.

Residential Property

• Washington’s Renewable Energy Cost Recovery Incentive Payment Program.
• California’s Single-Family Affordable Solar Housing.

Businesses and Industry

Plans that cover residential properties are present in the majority of states, though different payment schemes will often be applicable depending on the state. These are also the installations covered by the previously mentioned Residential Renewable Energy Tax Credit. Examples of residential property schemes include the following:

In many cases businesses and the industrial sector account for a much larger requirement for electricity than residential properties. As such, many states offer additional bonuses to business owners in an effort to convince them to convert to solar. Examples of business and industry schemes include the following:

• Montana’s USB Renewable Energy Fund, which can also be applied to residential properties in many cases. • Texas’ Commercial Solar PV Incentive Program.

Solar for Schools

Schools represent an area of potential expansion for solar technology, with statistics from The Solar Foundation indicating that there are more than 120,000 K-12 schools that do not have solar installed. Because of this, many states offer additional incentives to schools. In many cases these will be tied into other plans that are provided for commercial entities too. Examples of schemes for schools include the following:

• Alaska’s Sustainable Natural Alternative Power (SNAP) Program, which also provides initiatives for businesses and residential properties. • New York’s Solar Initiative Feed-in Tariff, which provides advantages for a range of sectors that includes non-profit schools.

How to Qualify

Qualification for any of these plans can depend on many factors. Research in this area is important, which is where the DSIRE website comes into play. Issues than can affect your eligibility include, but are not limited to, the following:

• The date of installation.
• The type of system being installed.
• The organization that offers the scheme, if one is linked to it.
• The property type.

It is also important to check that the plan covers the correct sector before applying for it. At times it can feel a little overwhelming, but there are a number of organizations that can help owners of solar power systems through the process.


Incentives are an important asset in the arsenals of both federal and state governments as they increase their efforts to provide cleaner energy in solar. As such, if you are thinking of having such a system installed it is important to conduct the relevant research to see if the system will be eligible for any of them. They act as a great way to make money back on the installation and some can even become good money-earners over time. You can get a solar free quote here, and check whether the incentives and tax breaks for your system will save you big each month.

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