Solar rebates and incentives

We’ve already discussed ways you can save (or even earn) money with solar tax credits, but rebate programs (tax or otherwise) can quickly change year-over-year, and keeping up with those changes can be a hassle. We want to help with that. In this article we’ll explain what a solar rebate is, who is eligible to receive a solar rebate, how solar rebates might change in the coming years, and what you can do in order to qualify for a solar rebate.*

What is a solar rebate?

A solar rebate is an amount of money that may be returned to you—from any organization—because you qualify for said return.

For clarity, we’d like to briefly review the different terms we (and the rest of the solar industry) use to describe solar rebates and how they differ.

The terms we use to describe solar rebates and their definitions

Solar rebate: Financial incentives that homeowners are offered from federal, state, and local governments once they’ve installed solar energy systems on their homes. These financial policies are implemented to promote energy independence from utility companies, create jobs, and reduce carbon emissions.

Solar tax rebate: the same thing as a solar rebate except for the amount of money for which you may be eligible will come from either the state or federal government because you both qualified and claimed it on your taxes.

Solar incentive: a benefit that encourages a person to go solar. This doesn’t have to be money. It can be the desire to generate clean, renewable energy, or the potential to save on your monthly energy consumption.

Solar tax incentive: a tax-related benefit that encourages someone to go solar.

Solar credit: The amount at which your solar energy system offsets your traditional energy, and goes back onto your energy bill as a credit, as long as you’re enrolled in a net metering program with your utility company.

Solar tax credit: The federal solar tax credit, also known as the investment tax credit (ITC), allows you to deduct 26 percent of the cost of installing a solar energy system from your federal taxes. The ITC applies to both residential and commercial systems, and there is no cap on its value.

Solar Renewable Energy Certificates (SREC): an SREC is a representation (often in the form of a certificate) of the renewable energy that a homeowner has generated from their solar energy system. Entering into an SREC program allows the homeowner to sell their certificates to their utility company at a specific price.

Am I eligible to receive a solar tax rebate or credit?

That depends on the contract type you signed and when you signed it. To be eligible for solar tax credit(s) you have to own the Vivint Solar system, which means you either signed a Loan Agreement or Cash Purchase Agreement. Generally speaking, if you own the system, you own the solar tax credits.**

Federal Solar Tax Credit

Most solar energy system owners likely qualify for a federal solar tax credit called the Residential Renewable Energy Tax Credit (also known as the “Solar Investment Tax Credit” or ITC.

The federal solar tax credit works like this:

Again, if you own your solar energy system, you may be eligible for the solar investment tax credit. Even if you can’t claim the entire credit because your system hasn’t been activated for a year, it’s okay. The representation of your remaining ownership will “roll over” in the future, as the tax credit is in effect.

To find out if you qualify, reach out to a local tax advisor in your area.

It’s also important to note the reduction in the tax credit over time. If you own your solar energy system, you should also be aware of the solar tax credit cutoff dates:

You may also qualify for a federal tax credit based on when your system was installed and activated. To ensure you're eligible, we recommend contacting a tax advisor for details.

State Solar Tax Credit

The big thing to keep in mind about state tax credits is that eligibility varies from state-to-state and is based on local legislation and when you purchased the solar energy system. All states offer some form of solar tax rebate program. To determine if you’re eligible, simply contact a local tax advisor in your area. You can also check the requirements on your local .gov website.