California

Emerging Renewables Buydown Program

This rebate offered by the California Energy Commission provides renewable energy users with an immediate return on their investment. The incentive Expected Performance Based Buydown or EFBB, the rebate an upfront amount -per watt to defray the cost of buying and installing photovoltaic systems of       100 kW or less. The amount of rebate per watt lowers periodically as the amount of Solar Megawatts are installed and funds become used up.  It's available to residents, commercial businesses and agricultural enterprises connected to the grid in areas serviced by Pacific Gas & Electric Company, San Diego Gas & Electric Company and Southern California Edison Company.

Self-Generation Program

The performance model is the preferred model here in 2007 and as part of the California Solar Initiative there is a 3-step or 3-step process. Systems under 100kw work on Expected Performance Based Incentives (EPBB).
Systems greater than 100kw work on a Performance Based Incentives or PBI. As governed by the SDREO all rates will change to TOU Rate schedules and will require energy efficiency audits. PBI amounts at this time are $0.39 per KWh for Commercial Solar installations and $0.50 per KWh for government and Non-Profit installations.

Customers may opt into PBI for systems under 100kW

Solar Tax Deduction

Residents who borrow money to buy solar energy systems can deduct 100 percent of the interest from their California income tax. The deduction is for loans from publicly owned utility companies, but customers whose utility companies don't offer such loans may be able to deduct the interest of a home equity or home improvement loan.

Property Tax Exemption

Solar energy systems installed in California are not presently subject to property taxes.

Public Leadership Solutions for Energy Loan

This loan finances renewable energy systems in public buildings, such as those owned by cities, counties, special districts, schools and community colleges. Loans of $2 million or more with no maximum are available for the expected life of the project.

Federal

Solar Energy Federal Tax Credit

Residents and businesses receive a tax credit worth 30 percent of the cost of buying and installing a photovoltaic system. This legislation is part of the Energy Policy Act of 2005 (Section 1336- 1337). Beginning January 1, 2006 the Federal Government will allow you to take a 30% tax credit right off whatever taxes you would otherwise owe the IRS.

Federal Modified Accelerated Cost-Recovery System (MACRS)

Under the Modified Accelerated Cost-Recovery System (MACRS), 26 USC § 168, businesses can recover investments in solar and wind and geothermal property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to 50 years, over which the property may be depreciated. For solar, wind and geothermal property placed in service after 1986, the current MACRS lifetime class is five years.

Special 50% First year Depreciation Allowance

This IRS depreciation allowance, IRS Section 179, allows a 50% first year depreciation deduction for equipment placed into service. Check IRS publication 946 for more details.

With government Buydowns, tax benefits and energy savings, most all commercial and industrial solar systems will pay for themselves in just five years or less.