Few solar tax credits for off-grid homes

Anti-off-grid solar bailout

While grid connected homes now have a 30% tax rebate on all new solar installations in the recent Bailout Bill, off-grid homes are harder to finance. There is no cap on the size of the solar installation so wealthy grid-tied homeowners will receive the biggest subsidy.

Off-gridders do more than their fair share to reduce average energy consumption and the nation’s carbon footprint.

Gridded homeowners will also qualify for credits to help with the cost of installing top-efficiency windows, doors, roofs, heating and air-conditioning systems, and water heaters. Only certain products, the most efficient ones, will qualify. You can be sure retailers will call your attention to them, but you can research them yourself at www.energystar.gov.

For qualifying exterior doors, storm doors, metal roofs and insulation, the tax credit will be 10 percent of the cost, up to a $500 credit.

Windows, skylights and storm windows will qualify for a credit of 10 percent of the cost, with the credit capped at $200.

Central air-conditioning systems and heat pumps will qualify for $300 credits.

Top-efficiency furnaces or boilers that go beyond the government’s Energy Star standard will qualify for a $150 credit. Some super-efficient tankless or electric heat-pump water heaters will qualify for a $300 credit.

The really big-ticket investments, residential fuel cells and solar panels, allow you to generate your own electricity. They will qualify for bigger tax credits, and homeowners will have until the end of 2016 to get them installed and qualify for the tax break.

For solar water heaters (except those used for swimming pools) homeowners can get a tax credit covering 30 percent of the cost, up to $2,000. Investments in electricity-generating solar panels can garner a tax credit for 30 percent of the cost, without any cap. High-efficiency fuel cells may qualify for a credit equal to 30 percent of the cost, with a cap of $1,000 per kilowatt hour that can be produced.

Richard Deutschmann, a vice president of Chesapeake Solar in Jessup, said the typical home in the Washington area, if it has a roof facing the sunny south, uses a 3-kilowatt solar panel system that costs about $25,000 to $30,000 installed and generates about 350 kilowatt hours per month. Homes with solar panels still remain connected to the electricity grid. They can buy power from it when it’s dark or cloudy and can sell their surplus power back into the grid.

Such a system could also generate a federal tax credit in the $7,500 to $9,000 range. With the help of tax credits, the payback period — when your electricity savings have outpaced the initial investment — can be well under 10 years, Deutschmann said.

Depending on where you live and on the availability of funds, state and county programs may offer rebates, too. You can learn more about those programs at www.dsireusa.org — the Database of State Incentives for Renewables & Efficiency, which is funded by the U.S. Department of Energy.