Solar Energy Systems
What are the tax incentives for residential and commercial solar systems?
Homeowners are eligible for tax credits for qualified solar water heating and photovoltaic systems. Solar water heating systems produce hot water, photovoltaic systems produce electricity. Businesses are eligible for similar credits for solar equipment, including certain solar lighting systems. The credits are available for systems “placed in service” in 2006 and 2007.
Who is eligible for the tax incentives?
The tax credits go to individuals who install qualifying systems on homes they use as a residence, and to businesses that install solar equipment for their use.
What are the incentives and how do they work?
The tax credits are for 30% of the cost of the system. For individuals the maximum credit is $2000 for photovoltaic systems and $2000 for solar water heating systems in any tax year. To qualify, residential systems must meet certain criteria as follows:
Solar water heating:
- System must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the state government in which the system is located. SRCC is an organization set up by the solar industry to test and certify equipment so purchasers have an independent assessment of system performance www.solar-rating.org.
- At least half of the energy used by the system to heat the water must be solar energy. The credit is not available for expenses for swimming pools or hot tubs.
Photovoltaic systems:
- System must provide electricity for the residence, and must meet applicable fire and electrical code requirement
What do I have to do to qualify for these incentives?
Implementing regulations are now being developed by the IRS. We will post a link on this site as soon as these regulations are available. To qualify, tax payers will probably need to have evidence regarding:
- the cost of the system (including labor and piping or wiring to connect the system to a home’s plumbing and/or electrical systems),
- when it was placed in service,
- whether the system meets the qualifying criteria discussed above.
Where can I learn more about qualifying products?
Good sources of information about these systems include:
In addition to the federal tax incentives, complementary incentives may be available from your state or local utility.
If you are interested in lowering your electric utility bill or your Oil Supplier bill and would like a free initial consultation regarding the solar thermal and photovoltaic systems we can provide to meet these ends please call Advanced Energy Systems Development at (617) 775-1720 or email us using the form below.
