Switching to Solar
With a world that is focusing more on sustainability, an increasing number of homeowners are making the switch to solar energy as their source of power. Whether it is for a partial portion of the roof or the main source of power, switching to solar energy offers long-term benefits that will offer you and your family a piece of mind.
What are the benefits of getting a solar energy system?
For example, solar energy systems provide clean, pure energy from the sun to your home.
- They eliminate the use of greenhouse gas emissions and reduces the rate of collective dependance on fossil fuels.
- Since traditional electricity is mainly sourced from fossil fuels such as coal and natural gas, solar energy eliminates that and, in turn, creates an environmentally friendly solution for your home.
- Installing a solar energy system reduces or eliminates your home’s energy bills!
Who installs the Solar Energy System?
Although the end result provides long-lasting sustainability for your home, the entire installation process can last a while. While in the process of deciding on if Solar is right or you, an initial site visit will take place. The process will include:
- Taking measurements of your roof to determine the right size for the solar panels.
- Conducting a shade analysis, which is an essential step for the solar design to determine shading caused by surrounding objects and vegetation.
- Determining the best equipment to use, based on your specific timeline and budget.
Once the right provider has been selected, you will be meeting installers throughout the process, so you will remain informed with what is happening during every phase of the installation.
Is Getting Solar a Worthwhile Investment?
By making the transition to solar energy, it will either drastically reduce or fully eliminate your electric bills. When you choose to install solar power system for your home, you become less reliant on your electric utility and reduce your monthly electricity bill.
- A Solar Energy System usually has a lifespan between 25 to 35 years, which means a fully reduced range of electricity costs for decades.
- Getting Solar improves your home’s value in the long run. Positively, the long-term financial benefits will, in time, offset the costs.
What is a Federal Solar Tax Credit?
If you are unsure of what a tax credit is, it is an overall reduction in the amount of income tax you would originally owe. When you install a Solar Energy System, you will become eligible for the Federal Residential Solar Energy Credit, which is claimed on federal income tax statements for a percentage of the cost of a solar system.
How do I Become Eligible?
In order to receive the tax credit, the system must be:
- Placed during the tax year and generate electricity for your home located in the United States. For example, if you installed a system in 2021, it must be installed and have generated energy before December 31st, 2021 to claim a 22% tax credit.
- Located at your primary or secondary residence in the United States, or an off-site community solar project, if the electricity generated is credited against your home’s electricity consumption.
- Owned by you and neither leasing nor in an arrangement to purchase electricity generated by a system you do not own.
- New or being used for the first time.
Additional information about the Federal Solar Tax Credit can be found here.
Solar State Tax Credits
On the bright side, for those whose solar was installed before December 31st, 2015, your state credit can be used over a 5-year period, but only account for 50% of your tax bill in any one year. On the other hand, the North Carolina solar tax credit expired on December 31st, 2015. So, if you installed your solar energy system after 2015, you will be ineligible for the tax credit.
For South Carolina residents, anyone who is eligible can receive a 25% tax credit from the final cost of installing a new renewable energy system. Specifically, the state tax credit may only take $3,500 or 50% of your tax liability per year for up to 10 consecutive years. The maximum installation cost for a solar energy system is $35,000. Additional information about South Carolina Solar Incentives can be found here.
As mandated by the 2017 Energy Bill, Duke Energy offers rebates on solar energy systems, including:
- 50 cents per watt for commercial customers.
- 60 cents per watt for residential customers.
- 75 cents per watt for nonprofit customers.
For any customer who installed their solar energy system after January 1st, 2018, they are eligible to apply for the rebate. However, certain restrictions may apply. Also, as of 2021, there are 2 annual signup periods for rebates (1 in January and 1 in July). Additional information about the State Tax Credit can be found here.
What are Solar Renewable Energy Credits (SRECs)?
SRECs is a key benefit of solar that allows you to earn bill credits as your system produces electricity. In this case, you are being compensated for the electricity your solar panels generate. It’s a win-win! If you reside in a state where SRECs apply, you will expect to receive immediate and long-term returns from your switch to solar.
- SRECs exist as a result of Renewable Portfolio Standards (RPS), which are state laws that require utilities to produce a percentage of electricity from renewable resources.
- Fun fact: Over 30 states, including Washington D.C., have RPS as well as a renewable portfolio goal.
To meet RPS requirements, specific providers must obtain renewable energy certificates, otherwise known as RECs, to serve as proof whether renewable electricity has been produced on their own or by someone else.
Is it Time to Make the Switch?
After checking off every box during your cost-benefit analysis, deciding to make the switch to solar is a big decision that takes time to research and ask questions. Use your site visits as an opportunity to seek for clarifications from installers so you are confident before signing on the contract’s dotted line.