Solar energy costs have fallen 90% over the last decade and efficiency rates have risen dramatically. The value and benefit continue to grow as owners look for ways to reduce their energy costs and maintain energy consistency and price stability. Government grants, tax credits, and other incentives help offset some of the cost and are enticing.
The average installed cost ($/watt) for a residential solar electric system has dropped significantly and is between $2-$3/watt.
This USDA program helps increase American energy independence by increasing the private sector supply of renewable energy and decreasing the demand for energy through energy efficiency improvements. Over time, these investments can also help lower the cost of energy for businesses and agricultural producers.
Guaranteed loan financing and grant funding for agricultural producers and rural small businesses for renewable energy systems are generous.
REAP grants range from $2,500 minimum to $1 million maximum. The process of applying for and wading through the USDA REAP processes can be overwhelming and tedious. In fact, the USDA says “The REAP Grant Application process can take hundreds of hours over the span of a few months” on the application website. But the results are worthy.
Working with a partner who is knowledgeable and experienced in this area can significantly reduce the time and effort and increase success.
Capitalize on the US Government investment tax credit (ITC) and recoup as much as 30% of the project cost. This residential clean energy tax credit can cover solar equipment and installation. It can also be combined with other incentives like state programs, utility-funded programs and grants that support clean energy.
This tax credit allows you to use a part of the cost of a solar power system to reduce the income taxes you owe. Use IRS Form 5695, which covers residential energy projects, to claim the solar tax credit when you file a tax return.
The solar panel tax credit is 30% of eligible costs for the tax year 2023 through 2032.
Monetization of tax credits refers to the process of converting tax credits into cash.
The Inflation Reduction Act introduced two major monetization methods.
Transferability: This process allows for-profit project owners to monetize certain tax credits by transferring them to other taxpayers. Essentially, this enables renewable project owners and developers to sell tax credits for cash and simplifies financing for clean energy projects.
Direct pay: This process allows entities exempt from income tax—such as nonprofits, state/local/Tribal governments, publicly owned utilities, and rural electric cooperatives—to claim the equivalent amount of tax credit in the form of a direct payment from the IRS. This enables tax-exempt entities to take advantage of clean energy tax credits for the first time.
These options can increase cash flow and align tax credits with those who need them.
Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics – US Department of Energy
https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics
USDA Rural Development Energy Programs