How to Get Government Rebates for Residential Solar Power

It’s fairly easy to get a government rebate or tax credit for installing a solar system. And below you will find the information you need to let you know if it’s worth it. Solar power credits come in handy, as they are an extra incentive for saving on energy costs.

The solar power tax credit 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.



Getting Government Tax Credits

Federal government incentives are given in the form of tax credits. The current program in the United States will give you a 30% credit for 2019 and 26% for 2020 of the installation cost of your solar power system.  You have to purchase and install the system first, and then you can apply for the credit.

In addition to federal credits, consider applying for local and state incentives.  Contact your local utility company for utility incentives that you may be eligible for.  Use the energy incentives database at desire.org to determine the local and state programs that you can apply for in your zip code.

To apply for a federal tax credit, 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.


Federal Credits for Energy Efficient Improvements

You can claim an additional 10% tax credit for qualified energy-efficient improvements.  These include insulation that meets the 20180International Energy Conservation Code (IECC) criteria, and doors, roofs, windows, and skylights that meet or exceed the Energy Star program requirements.

To find out what exactly your insulation requirements are, go to the 2018 IECC page.  Once there, look at the insulation table in section 402.  The minimum insulation values (R-values) for your walls, roof (ceiling), floor, and slab are listed on table R402.1.2.  Once you know the minimum R-value, you can go to a home improvement store and purchase your insulation required.

For example, if your walls are made of wood, and your wood frame wall R-value is 13, go to a home improvement store (Home Depot, Lowe’s, Ace Hardware, etc.) and tell them that you’re looking for R-13 insulation for your wood-framed walls.  They’ll know the type of insulation to get, and they can help you with the installation. To find out if your other energy-efficient improvements meet this credit’s requirements, go to the Energy Star page to find out what the roof’s solar reflectance should be.

To make energy-efficient improvements on your roof, use a surface finish that has a solar reflectance value greater than the one indicated on the Energy Star page.  In most cases, the roof would only need to be painted white or topped with an aluminum sheet.  To give you an idea of the solar reflectance of several finishes, for example, white paint has an absorptance of 0.2 and a solar reflectance is 0.79.


A Few Facts on Solar Government Tax Credits

    • 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 consumers 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 this credit, you need to submit your taxes with form 1040.  This 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 this credit.
    • There is also a 30% tax credit for using wind energy, fuel cells, or geothermal heat pumps.
    • You can only collect the tax credit if you own the solar system.  Leasing the system does not make you eligible to collect it.

Residential Solar System Cost

You can get details on the average cost of a complete, grid-tied, solar PV system, with rebates included, by clicking here.  They make it really easy to understand how much a PV system for your house would cost and how to set it up depending on your location.


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