Federal and State Incentives
Reduce Utility Bills
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In a typical household, water heating accounts for 30% of the overall energy used. Solar Water Heating translates into instant savings and lower utility bills. For example, an average family of four using 20 gallons per day per person saves approximately $100 per month.
Due to long term contracts signed by utility companies and increased consumer demand energy prices are expected to increase on a yearly basis. Installing a hot water system by Free Hot Water now protects you from soaring energy prices and appreciates your home’s value.
Federal and State Tax Incentives
Solar hot water systems qualify for federal income tax credits. Many states are also allowing additional income tax credits. For more information on solar incentives and rebates that are available in your area see State Incentives.
Residential Renewable Energy Tax Credit
In addition to Federal and State tax incentives, taxpayers may claim a credit of 30% of qualified expenditures for systems for a dwelling used as a residence in the United States. Qualified expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to your home. Credits are available upon system completion (for existing homes) or when the system is placed in service (new homes.) If the federal tax credit exceeds tax liability, the excess amount may be carried forward. The maximum allowable credits, equipment requirements and details vary. Always check with your solar professional for current credit and incentive information.
Solar Water Heating Property
- There is no maximum credit for systems placed in service after 2008. The maximum credit is $2,000 for systems placed in service before January 1, 2009.
- Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2016.
- The Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed must certify equipment for performance.
- At least half the energy used to heat the dwelling's water must be from solar in order for the solar water-heating property expenditures to be eligible.
- The tax credit does not apply to solar water-heating property for swimming pools or hot tubs.
- The home served by the system does not have to be the taxpayer’s principal residence.
The Solar Energy Industries Association (SEIA) has published a three-page document that provides answers to frequently asked questions regarding federal tax credits for solar energy.
Federal Tax Credit Information and Claim Form
For a free evaluation of a Solar Hot Water System for your residential or commercial application contact us
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