It\’s Getting Hot In Here

Cross posted on the Eastern Energy Systems blog.

Solar rebates are really good right now, but they’re not simple or straightforward. Three different rebates typically combine to make solar pay for itself in as little as 4 years (in Long Island, for instance) and make the owner money after that. But those rebates are from 3 different places – and they don’t apply to everyone.

Two of the major rebates are tax credits. The federal government agreed to increase its tax credit from a cap of $2000 to a full 30% of the cost of the system. This can be over $20,000 for many homes. New York state, like many states, has a 25% tax credit which is still capped at $5000. Unfortunately – and this is the key – you need to pay income tax to get these.

While its great that the government is able to provide such a strong incentive, they rule out a large percentage of the population who don’t pay any income tax, and therefore can’t receive the tax credit.  And yet, Americans over 65 have the highest rate of home-ownership: 80% in 2008. Whey are we ignoring this large percentage of the population, effectively preventing them from making investments with their money and their homes that will benefit future generations and make them more secure against rising energy prices after they stop working?

The third rebate is the one that should be focused on.  For example, the Long Island Power Authority gives an up-front rebate of $3.5/watt, or about 40% of the installed system cost. This rebate reflects how how solar has developed as an industry in Germany and other parts of Europe.

The federal government should make rebates available to all people, regardless of age, and they should simplify the process by providing a single-source for rebates: through the utility companies. Then we can get in the business of installing solar on house after house, putting Americans to work and strengthening our clean energy future.