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Residential Financial Incentives for Solar |
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FINANCIAL INCENTIVES
FOR
RESIDENTIAL SOLAR PV SYSTEMS
2007-2008
The current financial incentives for the installation of a solar system that uses solar energy to generate electricity (“Solar PV”) in the residential sector presently break down into the following two categories. For a detailed analysis of Financial Incentives on a State-By-State basis, including Federal Programs visit www.dsireusa.org. All Solar PV systems sold by Solar Systems International, Inc. incorporate components that meet all necessary standards to qualify for applicable financial incentives.
A
Buy-Down Programs
These are programs typically run at the state or local level. They provide funds toward the cost of purchasing and installing a qualified grid-interactive Solar PV system and are sometimes loosely referred to as “Rebates” (1) .
Participation in these programs in California depends on (1) Whether the home is “new construction” i.e. not yet built, or an existing residence; and (2) The residence location and the utility provider. For most owners of existing homes in California the program is administered by the particular utility company under the California Solar Initiative (“CSI”). The amount of the “Rebate” is based on the size of the PV system as measured in AC Watts as adjusted by a design factor and can be paid in a one-time lump sum payment based on the expected performance of the system (“EPBB”) or monthly installments over five years based on the actual performance of the system (“PBI”). The “Rebates” are now reserved on a first-come, first-served basis on a declining schedule and are not locked-in until a reservation application has been submitted and a Conditional Approval Letter is issued by the Program Administrator. The current value of the “Rebates” can be found at www.sgip-ca.com. However, many local utility companies in California (Municipalities) operate their own programs. Solar Systems International, Inc. will assist you in assessing your particular entitlements and assist you through all stages of the application process.
B
Federal Tax Credits
The following information is presented for convenience only and is subject to change. Before purchasing a Solar PV system you should consult with a qualified tax professional to determine your particular tax benefits.
Federal Energy Tax Credit. The Energy Policy Act of 2005 (“The Act”) creates a federal energy tax credit equal to 30% of the net cost of the installed system after deducting any Buy-Down Funds, for qualified Solar PV “placed in service” or activated during the period beginning January 1, 2006 and ending December 31, 2008. For residential systems, the tax credit is capped at $2,000.00. Under The Act a Solar PV system is considered “purchased” at the time of installation. See generally Section 1335 of The Act.
(1) A hidden benefit is that these funds are, under proper circumstances, not included in the gross income of the recipient/owner of the dwelling unit for federal income tax purposes. 26 USC §136 and IRS Publication 525.
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Solar Systems
International, Inc.
1235 W. Collins Ave.,
Orange, CA. 92867
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