System Financing & Incentives
SolSource can provide financial assistance for both residential and commercial-scale projects. Of critical value to the customer, is our ability to ‘float’ the rebate offered through utilities and/or state agencies on PV systems. By doing so, SolSource allows the customer to reduce their out-of-pocket expenses.
Another option is for customers to obtain a second mortgage or home equity loan secured by your property. If mortgage financing is not available, you may wish to consider a conventional bank loan.
For commercial, municipal or federal government projects, SolSource can provide turnkey financing for clients who wish to lease, rather than own a Energy Solutions system. Our goal is to remove the financing barrier to making use of solar technologies.
Financial Incentives in Colorado
On November 2, 2004, Colorado voters made history by approving Amendment 37, a renewable portfolio standard (RPS). This was the first time in the nation’s history that an RPS was put directly before voters rather than passed by a state’s legislature. Amendment 37 took effect December 1, 2004.
The initiative required Colorado utilities with 40,000 or more customers to generate or purchase a percentage of their electricity from renewable sources according to the following schedule:
- 3% from 2007 through 2010;
- 6% from 2011 through 2014; and
- 10% by 2015 and thereafter.
Of the electricity generated each year from renewable sources, at least 4% must come from solar technologies. At least one-half of this percentage must come from solar systems located on-site at customers’ facilities. Other eligible technologies include wind, geothermal heat, biomass facilities that burn nontoxic plants, landfill gas, animal waste, small hydroelectric, and hydrogen fuel cells.
Rebates from Xcel
Xcel Energy’s Solar*Rewards Program provides up to a $4.50-per-watt (DC) incentive for customers who install grid-connected photovoltaic (PV) systems at least 0.5 kilowatts (kW) in capacity, up to a maximum of 10 kW-DC.
The incentive is structured as a $2.00-per-watt rebate and $2.50-per-watt Energy Solutions Credit (REC) payment. The REC payment may be adjusted, either up or down, based on the calculation of expected kWh of electric output as compared with an optimally oriented, fixed (i.e., non-tracking) system at the customer’s location. Battery backup systems are not covered by the rebate.
To qualify for a solar rebate, participants must submit an application and receive an approval letter prior to installing the system. SolSource will help you with this filing.
Net metering (the ability to ‘sell excess power back’) is calculated at the end of each monthly billing period and credited to the next month’s bill. If a customer has negative usage (e.g. - generated more kW’s from the PV system than bought utility) at the end of a calendar year, the customer will be paid for the credit.
Rebates from Aquila
Aquila's On-Site Solar PV Rebate Program provides an incentive of up to $6 per watt DC of installed photovoltaic (PV) capacity. This includes a $2 per watt for the PV and a separate $4 per watt payment for the Energy Solutions credits (RECs) associated with the PV-generated electricity of a PV system up to 10 kW over a 20-year period.
Rebates and REC payments for PV systems will be calculated as follows:
- A rebate of $2 per DC watt; and
- A one-time REC payment, currently set at a rate of $4 per DC watt. The REC payment may change depending on the total amount of PV installed by Aquila's customers.
- For systems larger ranging from 10 kW to 100 kW, the REC payment will be determined by the total amount of electricity generated by the PV system each year. The value of the payment is based on the average annual market price of solar energy RECs in Colorado for the calendar year.
For more information on Colorado and other state solar rebate programs, visit:
http://www.dsireusa.org/
Colorado Solar Access Law
Colorado's state solar access laws prohibit any residential covenants that restrict solar access. Additionally, Colorado's solar easement provisions allow property owners to voluntarily create solar easements for the purpose of protecting and maintaining proper access to sunlight.
The City of Denver protects solar access through §59-125, Denver Revised Municipal Code, which prevents excessive height on adjacent properties to the south.
The City of Boulder's solar access ordinance guarantees access, or "solar fences," to sunlight for homeowners and renters in the city. This is done by setting limits on the amount of permitted shading by new construction. A solar access permit is available to those who have installed or who plan to install a solar energy system and need more protection than is provided by the ordinance. For new developments, all units which are not planned to incorporate solar features must be sited to provide good solar access. They must also have roofs capable of supporting at least 75 square feet of solar collectors per dwelling unit. Non-residential buildings have similar requirements for sitting.
Federal Tax Credits for Solar
The Energy Policy Act of 2005 (EPAct 2005) established tax credits for both solar electric and solar hot water systems that apply to homeowners.
- For solar photovoltaic (PV) systems, the allowable tax credit is 30% of the qualified PV system expenditures up to a maximum tax credit of $2,000.
- For solar hot water systems, the allowable tax credit is 30% of the qualified solar system expenditures up to a maximum tax credit of $2,000.
Additional information on which solar systems qualify for these tax credits can be found at:
Solar hot water systems: www.fsec.ucf.edu/solar/
Photovoltaic (PV) systems: www.fsec.ucf.edu/pvt/
Internal Revenue Service: IRS Notice 2006-26.
For Commercial scale systems, the EPAct increased the business investment tax credit from 10% to 30% for solar energy property placed in service during 2006 and 2007. There is no financial cap for commercial or industrial applications. The Federal government also provides an Accelerated Depreciation Allowance for solar energy systems, which improves the return on investment.
Download PDF on Accelerated Depreciation Allowance
For more information on the EPAct of 2005 and Federal Solar Tax Credits, visit:
http://www.seia.org/manualdownload.php
Energy Efficient Home Credit
Homebuilders can receive a tax credit of $2,000 for homes that reduce energy use for heating and cooling only (not hot water) by 50% compared to the national model code. Each energy efficient home must be constructed and substantially completed by August 8, 2005. The home must be acquired in 2006 or 2007 and used as a residence.
IRS rules on qualification for new site-built home credit may be found in IRS Notice 2006-27. IRS rules on qualification for manufactured home credit may be found in IRS Notice 2006-28.
Commercial Buildings – Energy Efficiency
The EPAct offered businesses a deduction of $1.80 per square foot for commercial buildings that achieve a 50% reduction in annual energy cost to the user, compared to a base building defined by the industry standard ASHRAE/IESNA 90.1-2001. Energy costs refer only to heating, cooling, lighting and water heating.
Each of the three energy-using systems of the building — the envelope, the heating, cooling and water heating system, and lighting system — is eligible for one third of the incentive if it meets its share of the whole-building savings goal.
Eligible buildings include commercial buildings such as: offices, retail buildings, warehouses, etc., rental housing of four stories or more, and publicly-owned buildings. For publicly-owned buildings, there is a provision allowing the credit to pass through to the "person primarily responsible for designing the building."
New construction in an existing building is also eligible for the tax deduction, with one third of the deduction amount for new construction that affects the new energy-using system (such as lighting or heating, cooling and water heating). IRS rules for qualification of this tax credit may be found in IRS Notice 2006-52.
Download PDF on Commercial Tax Credit Benefits
For more information about energy efficiency, see: www.aceee.org |
