Homeowners can receive 30% off the cost of solar in the form of a federal energy tax credit.
When you go solar in the U.S., the federal government will give you a solar tax credit of 30% off the cost of the solar system. When you go solar with Sunrun, we file for the energy tax credit for you and immediately pass on the savings, so you don’t have to wait until tax time.
About the Federal Solar Tax Credit
When you purchase a residential solar system, the federal government will give you a 30% tax credit, lowering the amount of taxes you owe by 30% of the cost of the solar system.
If you purchase a home solar system that costs $45,000, you will pay $45,000 upfront, and then receive a credit of $13,500 when you file you personal federal income taxes the following year. This solar incentive is different from a cash rebate, which gives you money back after filing for the rebate.
Unfortunately, most homeowners don’t owe enough in federal personal income taxes to use all of the solar tax credit. Others may not be able to afford to pay full price for the panels and wait while thousands of dollars are tied up until tax time.
As it stands as of December 2015, the federal solar investment tax credit for residential rooftop solar is set to expire in 2021. (Originally, it was set to expire in 2008, and then 2016, but advocates were able to get an extension). With the extension of solar Investment Tax Credit, there has never been a better time to go solar - click here to find out if solar by Sunrun is right for you!
Using the Solar Energy Tax Credit with Sunrun
With Sunrun solar service, it’s much easier and more affordable to invest in solar power. Sunrun files for the tax credit, handles all the paperwork, and immediately pass on the savings to you in the form of a low upfront cost. This way, you don’t have to pay a lot of money upfront to go solar, nor do you have to wait a year to see the benefit of the tax credit. Learn more about a Sunrun solar lease here.
Solar Renewable Energy Credits (SRECs)
In some states, you can earn and sell credits for the electricity your solar system produces. In certain states, such as Maryland, Massachusetts, New Jersey, and Pennsylvania, homeowners receive Solar Renewable Energy Certificates or Credits (SRECs) for generating solar electricity. They can sell or participate in SREC trade in their local SREC market.
1 SREC = 1,000 kilowatt-hours (kWh) of solar electricity
SREC prices can fluctuate and are determined by:
Price of the Solar Alternative Compliance Payment (SACP)
The SACP is the price electricity suppliers, such as utility companies, must pay if they don't meet their renewable energy targets. Renewable energy targets are set by the state's Renewables Portfolio Standard (RPS). RPS programs require electricity suppliers to get a certain portion of their energy from renewable sources.
Because homeowners can sell their SRECs for additional income, SRECs help lower the net cost of going solar. If you choose to get solar through a Sunrun power purchase agreement, you will not own SRECS. Sunrun will hold the SRECs, and pass the value onto you as savings via a lower electricity rate. You'll get the financial benefit of the SREC without the market risk. If you buy your system from Sunrun, you will own the SRECs.