National and State Tax Credits
Federal Investment Tax Credit (FITC)
This national tax credit allows solar panel owners to deduct 26% of the cost of solar from their federal tax burden after the solar system is installed. Essentially, the ITC represents a 26% nationwide discount on solar. The tax credit is set to gradually decrease each year from 2020 and onward, so we strongly advise that home and business owners get the process started soon so they can take advantage of this great incentive.
State Solar Tax Credits
Like the federal tax incentive, state-level tax credits allow solar panel owners to deduct a percentage of the total cost of solar from their state tax burden. These tax credits vary widely by state; in Massachusetts, for example, the state-level tax credit is 15% with a maximum credit of $1000.
SRECs and Feed-In Tariffs
Feed-In Tariff (FIT)
In states with FIT programs, utility companies purchase clean energy from solar panel owners at higher-than-retail rates. In general, the income from FIT is higher for consumers than the energy savings of consuming the power themselves. In Massachusetts, the SMART program compensates solar production with an extra 40-75% of value on top of retail net metering rates.
Solar Renewable Energy Credits (SREC)
In states with SREC programs, one credit is awarded for every 1000 kilowatt-hours of energy produced by solar panels. These are collected and then sold to the utility company for a profit. The price for SRECs vary by state, but per-year profits can amount to thousands of dollars. New Jersey, Illinois, Delaware, Maryland, Ohio, and Pennsylvania have active SREC markets.
You install a 10 Kw solar power system
Your system generates 10 SRECs a year
You can sell each SREC you produced for $200
Making you $2,000 a year. (10 SRECs x $200)
Plus all the savings on your energy bill
Solar puts money straight in your pocket!