Average Home Solar Costs
According to data collected by the U.S. Energy Information Administration (EIA), in 2013, the last year that data was analyzed, the energy consumed in an average American home was 908 kilowatt-hours per month. The average size for home solar systems is between 2 and 5 kilowatts. Average solar costs for residential PV systems range from $5,000 to $20,000, before rebates and tax credits.
The amount you can save by installing solar panels will not only be affected by the cost of conventional energy at your location, but by the solar rebates and tax credits for installations that may be available where you live. While the federal government’s tax credit incentive program is available to all Americans who wish to go solar, incentive programs offered at the state and local level vary from location to location.
The Federal 30% Off Tax Credit ProgramThe federal government incentive program covers up to 30% of the cost of installing a residential solar system, provided in the form of a tax credit. Some states offer cash rebates as well, often in conjunction with public utilities.
In most states, public utilities are required to invest in renewable energy, especially solar electricity. In order to meet these mandates, utilities offer rebates, incentives, loans and buy-back programs to their customers who install PV systems, making it easy to earn credit from your utility by going solar. Cities and municipalities may offer additional incentive programs as well, like the excellent top 10 solar cities in California.
Installation costs may be further offset through “buy-back” programs. Many states offer a Solar Renewable Energy Credit (SREC) for each megawatt-hour of solar-generated electricity. Depending on local policies, the credits can be sold on the solar market or back to the public utility, often for upwards of $600 apiece.
Some utilities offer other options, such as providing credit for surplus energy, aka net metering, that a home PV system generates to the homeowner’s electric bill.
California solar incentives: Rebates and Tax Credits
Depending on your location and your utility rebate amounts, there are several solar rebates and tax credits available for the benefits of homeowners. Solar installation is now more affordable than ever, as in most states, rebates and tax credits can reduce installations costs by up to 30%.
These incentives are not indefinite and most state and federal incentives are being phases out. So declining solar incentives coupled with declining solar costs make the current circumstance the best time to consider solar in order to lower installation costs and maximize total savings.
Many states, counties, cities and sometimes even utilities offer solar rebates. The rebate amount varies depending on the type, size and popularity of the program. Take the example of ‘California Solar Incentive Rebate Program’, it’s been around for several years but rebate programs have begun to dwindle and even expire in several utility districts. We at King-Solarmans know these rebate program’s every miniscule details, we know them inside and out. We work personally with every customer to get the best rebate options and we even process rebate claims on our client’s behalf who purchase from us directly.
Another great incentive for homeowners are solar tax credits. California federal solar tax credit is the largest incentive for home solar power, the current federal tax credit is about 30% of the post-rebate price of solar installation. What this represents is thousands of dollars’ worth of subsidiaries for homeowners interested in purchasing solar power. Tax credits can only be claimed by the home owner through federal income tax filing for the year that the solar power installation was completed and signed off by the utility.
Solar incentives on leases or Power Purchase Agreements
A homeowner’s ability to collect solar rebates and tax credits depends on how the homeowner decides to pay for the system. Purchase of solar power allows credits and rebates to be claimed directly against installation costs. Third party financing is an option used by many homeowners to finance or even eliminate upfront installation costs. Solar leases and power purchase agreements (PPA) are common financing options.