Solar Photovoltaic: Financing & Incentives
Achieve has access to a variety of financing options for our renewable energy solutions. Programs and rates vary substantially based on which product(s) are being financed, the size of the project and the location. We encourage you to discuss financing alternatives with us.
There are very strong incentives for the installation of solar power. The incentives can be different for residences and vary from state to state. Achieve tracks these programs and will help you understand how rebates can make your solar installation more economical.
Many states offer rebate programs for the installation of PV systems. The amount of the rebates vary but can be up to about half the cost of installation.
The Internal Revenue Code provides an investment tax credit (ITC) for certain types of energy projects, including “equipment which uses solar energy to generate electricity.” Historically, through 2005, the size of the solar credit was equal to 10% of the project’s “tax credit basis” – i.e., the portion of system costs to which the ITC applies. The Energy Policy Act of 2005 temporarily increased the solar credit to 30% of a project’s tax credit basis, for projects placed in service between January 1, 2006 and January 1, 2008. In late-December 2006, the Tax Relief and Healthcare Act of 2006 extended the in-service deadline to December 31, 2008, and in October 2008, the Energy Improvement and Extension Act of 2008 extended it once again for a full eight years, through December 31, 2016.
The IRS provides a Modified Accelerated Cost Recovery System through which certain investments in solar power projects can be recovered through accelerated income tax deductions for depreciation. Under this provision, which has no expiration date, “equipment which uses solar energy to generate electricity” qualifies for 5-year, 200 percent (i.e., double) declining-balance depreciation. Accelerated depreciation applies to business tax returns.
Clean Renewable Energy Bonds (CREBs) are a financing tool intended to “level the playing field” for non-taxable entities specifically, governmental entities and electric cooperatives, and recently extended to public power providers) that cannot directly utilize federal tax credits (or accelerated tax depreciation benefits). CREBs are “tax credit bonds,” which means that the bond purchaser receives a federal income tax credit in lieu of interest payments. From the borrower’s perspective, CREBs are therefore essentially the equivalent of a zero-interest loan.
After production, PV systems have virtually no negative impact on the environment, making them one of the cleanest power-generating technologies available. PV systems produce no air pollution, hazardous waste, or noise, and they require no transportable fuels. Because of these benefits, PV can play an important role in mitigating environmental problems such as air pollution, fossil fuel usage and global warming