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Save Half or More on Solar Panels!

A solar energy system will significantly reduce electric bills, which will pay off even more as electricity costs rise. Having a personal energy source can improve the reliability of your supply and there are considerable environmental benefits of getting energy directly from the sun.

But installing one of these systems isn't cheap. A 2-kilowatt (kW) system, the preferable size for most single-family homes, costs at least $20,000 to purchase and install. Fortunately, many local, state and national rebates make living in a solar-powered home more affordable. In some areas, residents can install a system for less than half the retail price!

Nationwide, there are more than 200,000 homes with solar panels, including 10,000 that are entirely powered by solar energy. There are solar powered homes in every state.

National Tax Credit

The new Energy Policy Act offers consumers a tax credit of 30% on the cost of a PV system and a solar water heater, up to $2,000 for each.

House in California with solar shingles installed on an awning

This tax credit starts January 1, 2006 and ends December 31, 2007. Find out more about the federal tax credits for solar.

State Rebates

Many states offer substantial rebates that can be combined with the federal rebate for further savings. Look for rebates on PV systems in your state at the Database of State Incentives for Renewable Energy. For further information on cost savings, visit the Department of Energy's EERE new Financial Incentives website. A few examples of state incentives are:

Connecticut - Homeowners receive a rebate of $5 per Watt, which is $5,000 per kW, up to $25,000 when they install a new PV system. For a 2-kW system this amounts to a $10,000 state rebate. Some municipalities also offer property tax exemptions on the cost of the system.

Massachusetts - Homeowners can receive a 15% tax credit of the cost of their PV system, up to $1,000. They will also get a property tax exemption on the entire cost of their system.

California - Until January, 1 2006, homeowners can receive a tax credit of 7.5% of installed cost of a PV system, or $4.50 per Watt of rated peak generating capacity, whichever is less. These systems will not be assessed for property tax purposes.

California lawmakers are also considering passing the Million Solar Roofs initiative, a 10-year incentive fund encouraging both owners of residences and commercial buildings to install solar power.

There are also many utility sponsored rebates in California. For example, the Sacramento Municipal Utilities District (SMUD) offers a rebate of $3 per watt, which is $3,000 per kW, up to $15,000. SMUD also offers a rebate of $400 on solar water heaters.

Wisconsin - Homeowners can receive a 35% tax credit up to $35,000 for most PV systems; and 30%, up to $3,000, for solar water heaters.

Further Information

Database of Financial Incentives for Renewable Energy and Energy Efficiency

Photovoltaic Roofing from Toolbase

Photovoltaics for Buildings by the National Renewable Energy Laboratory

PV Frequently Asked Questions from the Solar Energy Industries Association

Map of the sun's intensity demonstrating that all US states can benefit from PV panels

Content updated on 12/5/2006

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