Solar Grants, Rebates, And Other Financial Incentive Programs
Most of the countries in the world offer incentives or rebates to
their citizens to install and use solar energy. Japan was one of the
first countries to start this in the early 1970’s, about the same
time as the oil embargo. Adding up all the different types of aid
that homeowners in Japan get to use solar energy the cost of using
solar energy in Japan is discounted by about 70% from the retail
cost.
The US hasn’t always offered great incentives to homeowners to use
solar energy but that is quickly changing. The list of incentives
that are offered changes frequently so make sure that you stay
updated on what incentives are still being offered before you buy
your solar energy system.
Federal Financial Incentives For Using Solar Energy
Here are some of the programs offered by Federal governments plus
some federally sponsored private programs that provide financial
incentives for people to install solar energy systems in their
buildings. Check with your government offices for more information
or additional programs.
Residential Energy Conservation Subsidy Exclusion
This is a tax rebate that allows homeowners that have installed an
alternative energy source like solar energy to claim a tax credit on
their yearly taxes for the amount of money that they would have
spent using traditional grid electricity.
Energy Efficient Mortgage
This Federal loan program allows homeowners to borrow the full cost
of installing alternative energy systems to a new home or an already
existing home and guarantees the loan. So if you don’t have great
credit or you wouldn’t qualify for a loan through another lender you
can still apply for the Federal Energy Efficient Mortgage loan and
be approved since the government guarantees the loan. The Energy
Efficient Mortgage is different than the Energy Star Mortgage.
Energy Star Mortgage
An Energy Star Mortgage is not guaranteed by the Federal government
and is a private mortgage processed for the sole purpose of adding
new energy efficient systems to a new or pre-existing home. Some
Energy Star lenders allow homeowners that have older homes to borrow
up to 5% of the home’s value in order to pay for a new energy
efficient solar energy system. Other lenders will only loan enough
for the exact cost of the solar energy system.
Because Energy Star mortgages are not guaranteed by the Federal
government if you don’t have good credit you might not have an easy
time getting a loan if you don’t have an existing home you can
borrow against. There are about 49 lenders that work with the
government to provide Energy Star mortgages specifically to help
homeowners absorb the cost of installing solar energy systems so if
you don’t have great credit don’t assume you can’t get an Energy
Star mortgage, you might just have to go through several lenders
until you find one that will work with you.
Residential Energy Efficiency Tax Credit
This Federal tax credit gives you a rebate on 100% of the cost of
buying solar hot water heaters or solar heating systems or will give
a tax credit of 10% of the cost of all home improvements that you
make to increase energy efficiency like installing solar heating in
your home.
Residential Solar and Fuel Cell Tax Credit
This tax credit gives you up to $2000 back on the cost of a new
solar fuel cell system or solar water heating system. But, in order
to be eligible for this tax credit at least half of the power in
your home needs to come from solar energy. So if you install a small
solar energy system of one or two solar panels so that you can get
some of the energy for your home from solar energy but you don’t get
100% of your energy from solar energy you still qualify for this tax
credit.