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30% FEDERAL TAX INCENTIVE
One of the most remarkable ways to save on the cost of a solar system is the Federal tax credit. As quoted from the U.S. Department of Energy website: "A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. Consumers can itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government." Consumers who install solar energy systems (including solar water heating and solar electric systems) can receive a 30% tax credit for systems placed in service before December 31, 2016; the previous tax credit cap no longer applies. This translates to enormous savings. You can find more infomation regarding the Federal tax credit on the U.S. Department of Energy website. |
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THE CALIFORNIA SOLAR INITIATIVE
The California Solar Initiative offers cash back for installing solar on your home or business in the form of rebates. These rebates vary from one area of California to another, based upon the utility company covering that area. As stated on the California Solar Initiative website, "California Solar Initiative rebates vary according to utility territory, system size, customer class, and performance and installation factors." As an example, Southern California Edison, in conjunction with the California Solar Initiative, will reinburse $155 per watt on an installed system (based on A/C, as of 7/1/10). These rebates, in conjunction with the 30% Federal tax credit, will save the average residential solar system buyer approximately 42% of the total cost of their installation. And there will never be a better time to buy a solar system than right now. As stated on the CSI website, "The rebates automatically decline in "steps" based on the volume of solar megawatts (MWs) with confirmed project reservations within each utility service territory." In other words, as time goes on, the amount of rebates offered will become less and less until they are cut out all together. Truly, this is the best time to buy solar. You can read more about the future reduction in rebates here. |
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