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How to cash in on the IRS’ Investment Tax Credit
Mar24

How to cash in on the IRS’ Investment Tax Credit

Anticipating that the solar-plus-storage market could experience the same type of expansion the PV market did in the last decade, the IRS recently updated an eligibility ruling for a 30 percent Investment Tax Credit (ITC) on renewable energy storage.   The updated rule, passed before the start of 2016, extends the 30 percent ITC until 2021 and aims to clear up some of the confusion with regards to when solar energy storage qualifies for the tax credit.   “The federal government does not want to incentivize people to arbitrage energy from the grid,” Senior Consultant at the Engineering consultant firm DNV-GL Mike Kleinberg explains. “You cannot charge from the grid in the evening and then discharge during the day to supplement your PV — and also qualify for the ITC, because you’re not then really charging from renewable energy.”   In order to accomplish this, the IRS dictated that in order to be eligible for the ITC, taxpayers must not draw more than 25 percent of stored electricity from the grid. Additionally, if they draw more than 25 percent of power from the grid during the first year of applying for the credit, they will not be allowed to collect any portion of the energy tax credit in later years even if the system improves and complies.   In order to prevent batteries charging more than 25 percent from the grid, homeowners have taken to installing inverters on both their PV systems and their AC/DC power systems, linking them to a site master controller that monitors when and how fast storage units charge.   While the updated 2015 rule might seem more strict than the original one set forth two years earlier (which was much more vague about solar battery two-way grid charging) it also expands its definition of what constitutes “storage technology”, allowing for greater flexibility when applying for the credit.   For example, smart water heaters or ceramic heaters that know the weather and draw 25 percent or less from the grid would qualify....

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tax refunds for solar and wind power?

The American Wind Energy Association (AWEA) and Solar Energy Industries Association (SEIA) had a conference call recently to talk about restructuring of the wind and solar tax credits to make them more favorable in today’s bear market. In October of last year, congress extended wind and solar power tax credits and removed the $2,000 cap on residential installations. Although the extension of the tax credits for wind and solar power was a positive step towards helping renewable energy become mainstream, not everyone can take a tax credit, you have to have a tax liability to take advantage of a tax credit and putting today’s economy into perspective, not many people are going to be able to take advantage of the credit. The solar and wind industry associations are encouraging Congress and the Obama administration to covert the tax credit into a tax refund. A tax refund is the mother of all financial incentives because it would mean the federal government would send you a check for installing a wind turbine or solar panels, the results of converting the tax credit into a refund are obvious. Do you think the solar and wind power can convince the federal government to pay you to install a clean energy...

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Confessions of a Solar Electric System Owner

Recently, Pyccku , a well respected member of the TreeHugger forums installed a solar electric system on his home and documented the progress on his blog. We discussed that it would be beneficial to share his experience installing solar panels, so his experience can help others decide if solar power systems energize their lifestyles. Check out the Questions & Answers session below: Q: What made you first gain interest in solar panels? A: When we saw gas prices go up, we realized that energy costs are only going to go up, not down. We also hated that here in AZ there was so much energy coming from the sun, but hardly anyone tapping into it. So we did the calculations and found that even if the cost of energy stays constant, over the next 25 years our electric bill would add up to more than the cost of the solar. Q: How much are you saving per month? A: We haven’t gotten our first bill – but our average pre-solar bill was $165 on the equalizer plan (same amount year-round). We are anticipating having no bill for 8-10 months out of the year and only a minimal bill in the hottest summer months. Q: How long did it take to install the solar panels? A: Once they had the permits it took a little over a week for the whole project. The panels, inverters and wiring only took a couple of days. But we built an addition to our patio to put the panels on, so that added some extra time. Q: Was it difficult to find a solar panel installer? A: No, there are several here in Phoenix. Q: How much were paying originally for electricity? A: $165 per month. Q: Did you have to move out of the house to have them installed? A: No. We didn’t even have to be home for them to do any of the work! Q: How many solar panels do you have? A: 36 Q: Do your solar panels power your entire house? A: During most of the year, yes. During the summer we’ll probably need some power from the grid because of the heavy a/c use. Q: Did your electric spinning backwards once they were installed? A: The meter itself doesn’t spin backwards. It does keep track of how many kWh we take from the grid, and how many hours we give to the grid. Then the power company does the math and credits us for any excess. Right now, since we aren’t using much power at all, we are only using 10kWh/day, and we are giving 15kWh/day to APS....

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Solar Panel demand can’t keep up with supply

Many solar panel manufacturers and installers can’t keep up with the demand for solar panels and are not taking on anymore jobs in 2008 because they don’t either have the time nor supply to help anyone the rest of this year! This is due to the US federal tax credit expiring December 31s, 2008, people want to get their projects installed by the end of this year so they can pick up on that tax credit and is causing a strain on the supply of solar panels, this holds true especially for large business projects. Industry reports suggest as more manufacturing capacity is put online in 2009 solar panel demand will catch up with supply. There maybe a downturn in the solar and wind market next year if the renewable energy tax credit is not renewed by congress by the end of this year. Although electric rates are jumping up to historic highs, so hopefully we can get solar and wind technology to compete financially against the fossil fuel industry without rebates and tax credits. What do you think will happen next year to this booming industry if the tax credit is not...

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Get your solar energy / wind power system this year!

Congress has decided not to extend the federal renewable energy production tax credit for 2009. So what does that mean to you as a consumer? Well it depends. If you are a residence you qualify for a $2,000 tax credit when purchasing a solar energy or small scale wind power system. A commercial entity can qualify for 30% of the total cost of the system is refunded through a tax credit from the federal government; this tax credit is a primary reason for many residential and commercial renewable energy systems being installed. So think of this year as renewable energy systems being on sale! Take advantage of it, if you are thinking about going solar or producing your own clean green energy, stop waiting around because now is the time. To qualify for the federal tax credit your system has to be installed and active by December 31st, 2008. To get started the first step is to get a quote from a service provider in your...

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