How to Get Government Grants for Residential Solar PowerPosted by Mauro, LEED AP on Jul 3, 2012 in Blog, Green Homes, Renewable Energy
It’s fairly easy to get a government grant for installing a solar system. And you will find all the information you need to apply for one below. Solar power grants come in handy, as they are an extra incentive for saving on energy costs. The solar power grant will help you offset the initial installation cost of the solar power system.
There are two main types of solar power systems: water heating systems and photovoltaic (PV) systems. Water heating systems use heat from the sun to heat the water in your home and photovoltaic systems use heat from the sun to generate electricity. Solar water heating systems are simpler and less expensive to install than solar photovoltaic systems.
Federal government grants are given in the form of tax credits. The current program in the United States started in 2006 and expires in 2016. The credit will give you 30 percent of the installation cost of your solar power system. In addition to federal grants, consider applying for local and state grants. Contact your local utility company for utility incentives that you may be eligible for and check out the energy incentives database at desire.org.
To apply for a federal grant, fill out IRS Form 5695 (instructions included) 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 manufacturer’s 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 home’s energy must come from solar energy.
A Few Facts on Solar Government Grants
- The solar power system installed must be new. Used products are not eligible for tax credits.
- You are not required to have a private contractor to install the system. You can install it yourself
- For consumer building new homes, there is no upper limit on the 30% tax credit.
- A tax credit reduces the amount of tax you have to pay. For example, if you owe $1,000 in taxes, and you get a $500 tax credit, you will owe $500 in taxes
- To claim the energy efficiency credit, you need to submit your taxes with form 1040. The credit cannot be claimed with form 1040EZ or 1040A.
- The tax credit is not only for homeowners. Condo and co-op owners can claim the credit as well. People who rent are not eligible for the credit.
Residential Solar System Cost
You can get details on the cost of a complete, grid-tied, solar PV system over at Silicon Solar. They have a step-by-step solar sizing guide that makes it really easy to understand how much a PV system for your house would cost and how to set it up.