Recently, many states have seen an absolute boom in the installation of solar photovoltaic (PV) systems. Business owners and homeowners are now seeing solar as a very strong longterm investment, mostly due to strong, longterm financial incentives.
Much of the cost of a PV system is offset by tax credits and other tax benefits. Always consult your tax professional to verify which of these benefits applies to you!
Federal Tax Credits – Business and Residential
There is a 30% federal tax credit available for both business and residential customers, in all states. Click here for more details for businesses. Click here for more details for residential customers.
Federal Depreciation Benefits
Businesses can depreciate the cost of the renewable energy system on their taxes. This yields a benefit approximately equal to the business tax rate. This is known as Modified Accelerated Cost-Recovery System (MACRS). Click here for more details.
NY State Residential Solar Tax Credit
This program can provide a 25% personal state tax credit up to $5000. Click here for more details.
Sales Tax Exemption
In both Vermont & New York, all materials used for renewable energy systems are exempt from state sales tax.
Net Metering & Utility Benefits
This is available in both VT and NY. A solar electric system is connected to the utility grid and the energy you produce is credited to you at full retail value. Any credits you receive can be rolled over for 12 months. So, it is not necessary to match your electric production to the time of year you use the most power.
Vermont Solar Adjusters
All utilities in Vermont are now required to pay you a feed-in-tariff in addition to giving you full retail credit for your solar electricity. The exact amount of the feed in tariff varies by utility.
Group Net Metering (VT) / Virtual Net Metering (NY)
As a solar producer, you have the ability to send your excess monthly electric production to another electric user. This allows owners of solar systems to sell (or give) any excess electricity to others who may not have the financial means, or physical space necessary to install solar. This is useful for larger projects especially where an investor might install a large solar array, and then sell shares to other users at a rate that is lower than the utility rate. In this way, the investor adds a revenue stream to pay for the system, and the shareholder saves on their monthly electric bill.
Grants and Other Financing
Solar projects do carry a pricetag, and while they will certainly pay for themselves over time, most folks need some help covering the upfront cost. There are many options…
New York State Energy Research and Development Authority (NYSERDA)
NYSERDA provides cash grants to help pay for a portion of renewable energy systems. Click here to see the latest.
NYSERDA also provides an extra cash incentive for going solar. It is based on the system capacity and is committed in blocks. As one block is used up, the incentive rate goes down for the next block. Click here to see up-to-date rates.
Many folks approach banks they’ve already built a relationship with — this may be the best way to negociate better terms. Beyond that, many people search for solar specific loans. Click here for an example through VSECU. Home equity lines of credit are very useful as well, as you can likely deduct the interest payments from your yearly taxes, and they typically have low interest rates.
Vermont Economic Development Authority (VEDA)
VEDA is a State-supported nonprofit organization that helps businesses and farmers make investments in their business including renewable energy projects like solar! Click here for some of their energy-related options.
USDA Rural Energy for America Program (REAP)
This program can provide up to a 25% grant and a guaranteed loan for renewable energy projects for rural small businesses. All of Vermont (including downtown Burlington) is considered rural. Most of the North Country of New York state is also considered rural. It is a competitive grant with a lengthy application process. However, chances are good of being successsful. Click here for more information.