There are a variety of financial incentives available to homeowners who want to install solar panels to power their residences. These solar incentives can be in the form of grants, loans, or rebates and are available on the federal, state, and local levels. Let’s explore some of the available solar financing programs.
Perhaps the best known solar financing program is the Federal Incentive Tax Credit, also called the Residential Renewable Energy Tax Credit. Because this is a tax credit program, it functions more like a rebate where homeowners get money back after installing a solar power system. The amount a homeowner receives back is determined using a percentage, with no designated maximum credit. Each year, the percentage decreases. Homeowners who install solar panels in 2022 will receive 26% of the cost back on their taxes, but homeowners who install their panels in 2023 will only be credited 22% of the cost. This program, which has been in effect since 2006, will not renew in 2024 unless Congress takes action to extend the program, as they did in 2020.
Another solar incentive program is available in the form of an Energy Efficient Mortgage (EEM). The Federal Housing Administration offers these mortgages to both new homebuyers and existing homeowners who are looking to refinance. An FHA EEM can be used to make energy efficiency improvements to an inefficient home. With an EEM, rates and loan amounts are more favorable because of the cost savings the homeowner will enjoy thanks to their lower utility bills.
Financing assistance for solar panels isn’t restricted to federal programs. Many states, cities, and counties have their own solar panel incentive programs for homeowners. For example, the city of Philadelphia has a solar rebate program for residents who have installed solar panels in their homes since July 1, 2019 which is scheduled to expire at the end of 2024. The average household receives a rebate payment of $1,000.
Anne Arundel County in Maryland also has a local solar incentive program. Since going into effect in 2010, the High Performance Dwelling Property Tax Credit has offered tax credits between 40% and 80% of a homeowner’s property taxes. Homeowners can receive up to $3,000 back per year for up to five years under this program. Citizens who own energy efficient homes that meet LEED guidelines or National Green Building Standards are eligible to receive money through this crediting system.
Bright Eye Solar is an experienced team of solar energy specialists servicing homes and businesses in Pennsylvania, New Jersey, and Maryland. Our services include home energy efficiency audits, solar panel installation, and solar battery backup system installation. If you’re interested in speaking with one of our renewable energy experts, you can contact us today. We’d be happy to help you explore the solar panel incentive programs and financing options that are available to you.
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