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Smart ways to invest in solar power
By now, almost everyone has heard about the benefits of installing solar panels onto a home. Despite this, many have yet to make to the investment. One common concern that holds homeowners back is the misconception that it’s unaffordable. But the truth is, there are plenty of ways people can harness the power of sunshine without emptying their bank accounts.
If you’re like most people, you enjoy finding tax breaks you qualify for — what better way to make tax season enjoyable than to increase your return or decrease the amount you owe? If you install solar sometime before 2019, you can write off 30 percent of your investment, according to TurboTax.
After 2019, this percentage will decrease annually until 2021 when it completely goes away, so be sure to act fast.
If you did install solar panels in 2016 and want to claim them on your taxes this year, you’ll need to fill out IRS Form 5695 to calculate your credit, according to TurboTax. Then, you’ll enter the credit on your 1040. If you get a bigger tax credit than the amount you owe, you won’t get a check in the mail. Rather, the difference can be applied to your taxes next year. For example, if you get a $3,000 credit but owe $2,500 this year, the remaining $500 can be claimed when you file your 2017 taxes.
Zero out your energy costs
Most people who have a solar system on their house actually produce more energy than they use during the day, according to the Solar Energy Industries Association. Fortunately, in most of the U.S., a policy known as net metering allows solar-power generators to use that surplus power to decrease their energy bills.
When homeowners get their home net-metered, the electricity meter will run backward during periods when the home is producing more energy than is needed. This process will credit the homeowner for future electricity use, such as during nighttime hours when the solar system is generating less electricity than the household requires.
Net metering gives consumers the ability to control their electricity bills. SEIA pointed out that, over the next three decades, California public agencies and schools will save about $2.5 billion on electricity costs.
Net metering can help most Americans reduce their energy bills, but it won’t make them any money. The most a bill can be reduced to is $0, SolarWorld pointed out. However, there are some states and areas of the country that will actually pay consumers who direct their excess solar energy to the grid through programs called feed-in tariffs.
Not every state has these programs. One that does is Oregon, where consumers can get 45 or 55 cents for every watt generated, depending on which energy company they’re working with, according to the NC Clean Energy Technology Center at North Carolina State University.
San Antonio also offers a financial incentive for consumers to install photovoltaic systems on their homes or commercial buildings. People can get between 80 cents and $1.20 per watt, according to the NC Clean Energy Technology Center.
Taking the first step towards generating your own solar power is a big decision. But remember, there are plenty of ways to make the transition much more affordable. Plus, with a home improvement loan, you’re able to spread the cost out over months and years, and add tangible value to your home, making the investment much more feasible. In the end, your energy bill will be lowered, your house will be worth more, and you’ll reduce your impact on the environment.