Return on Investment | Solar Tax Credits

There aren’t many purchases an individual will make in the course of their life that will provide a return on their investment.  There is no return on the cars we buy, our counter-tops, and the utility bills we pay every month.  Yet we expect a return on our investment in clean, renewable, energy.  Fortunately with tax credits, SRECS, net metering, and reduced utility bills we can receive a return on a smart investment.

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If we evaluate this equation we can ask ourselves, “What are the gains from this investment?”  The benefits of reduced pollution, flexible infrastructure with distributed energy, and personal independence from market volatility all contribute to the gains.

A solar assessment will determine the amount of money you can expect to save on utility bills over the life of your system. The following links will direct you to information on state and federal incentives.  MPI will work closely with you to obtain the best return possible on your investment in alternative energy.

Federal Tax Credits

I.  Residential Solar Credit

  • Residents can receive up to 30% of the total installation cost off of their tax burden.
  • Any residual credit can be rolled over for subsequent years until the entire allotment is met.
  • Program will not expire until the end of 2016.

For more information go to the DSIRE database.

II.  Commercial Solar Credit

  • Businesses can choose to receive a grant from the US treasury instead of receiving the federal business energy investment tax credit
  • Under the federal Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions.

For more information go to:

  1. 1603 Program: Payments for Specified Energy Property in Lieu of Tax Credits
  2. DSIRE: Grants, ITC
  3. DSIRE: MACRS depreciation deduction

SRECS

WHAT is an SREC? SREC is the acronym for solar renewable energy credit for which there is a growing market in many states. One SREC represents 1000 Kilowatt hours of energy production.
WHO buys SRECs? Utility providers in states that have an RPS, or renewable energy portfolio standard, are required to obtain a certain percentage of their power from renewable sources like sun and wind.  As utilities operate across states, they may need srecs from one state to help meet an RPS in another state.
WHERE are SRECs sold? At present, Indiana PV owners can sell their SRECS into the Ohio, Washington D.C. and a portion of the Pennsylvania markets only. Just like any commodity, market prices fluctuate based upon supply and demand.  Many PV owners choose to sell through a broker to streamline the process and avoid market fluctuations.

Visit www.srectrade.com for SREC prices and more information.

MPI is partnered with Solsystems to assist our clientele with SREC trading options.

State and Local Utilities

  • Indiana:  solar thermal water systems are exempt from property taxes.  While they may raise the value of your property, you will not be taxed on your investment.

To view your state’s energy incentives and rebate programs go to the Database of State Incentives for Renewables & Efficiency (DSIRE).

Nothing in your area?  Contact your state representatives and let them know that you support alternative energy production and they can support policies that make renewable energy more accessible.

Local Utility Loans and Rebate Programs
  • These are unique to each electricity supplier
  • Examples: SCIREMC (South Central Indiana REMC) offers an Energy Efficiency Loan Program that includes solar thermal water systems.
  • IPL (Indianapolis Power and Light) provides a rebate program for small PV systems that pays $2.00/Watt up to $4000.00.
For a complete list of utility providers and the rebate programs they offer visit the DSIRE database.