Solar Tax Credits Explained

The excess amount can be carried forward.  The exact information is below regarding the Residential Renewable Energy Tax Credit:  A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the “placed in service” date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The excess credit may be carried forward until 2016, but it is unclear whether the unused tax credit can be carried forward after then. The maximum allowable credit, equipment requirements and other details vary by technology, as outlined.  For solar-electric property:

•           There is no maximum credit for systems placed in service after 2008.

•           Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2016.

•           The home served by the system does not have to be the taxpayer’s principal residence.


However, there is one more item that I want to talk about and that is the topic of GRANTS.  In fact, there is one grant that may be much needed for some of you living in areas where there is a very high cost to electricity.  So here goes:  The U.S. Department of Agriculture (USDA) offers an ongoing grant program for the improvement of energy generation, transmission, and distribution facilities in rural communities. This program began in 2000. Eligibility is limited to projects in communities that have average home energy costs at least 275% above the national average. Individuals, non-profits, commercial entities, state and local governments (including any agency or instrumentality thereof), and tribal governments are eligible for this grant. Individuals must work on a project that will benefit the community in order to qualify. Under this solicitation grants ranging from $20,000 to $3 million were available for a variety of activities including solar energy generation systems, renewable energy facilities used for on-grid or off-grid electric power generation, water or space heating, or process heating and power.  This grant program is not limited to renewable energy or energy conservation and efficiency measures.


USDA offers this through the Rural Energy For America Program (REAP).  This is a program that has funds available to complete energy audits, complete renewable energy development assistance, and install renewable energy systems including solar.  USDA Rural Development is at the forefront of renewable energy financing, with options including grants, guaranteed loans and payments.  USDA want to help create an America that runs on cleaner, homegrown fuels and has set a standard that calls for 80% of America’s electricity to come from clean sources by 2035.

Solar Panel Farms

Solar Farms


See You Next Time!  Dr. Stripling