Some people write off purchasing solar power, not because they assume it’s ineffective, but because they find the startup and installation costs to be too high. In order to help homeowners and businesses alike invest in a better future, the federal government created the solar Investment Tax Credit (ITC) policy in 2005. In 2015, the Solar Energy Industries Association (SEIA) successfully advocated for an extension of the policy until 2023.
The ITC is a 30 percent Federal Tax Credit that can be claimed against the tax liability of residential, commercial and utility investors. Homeowners are able to claim the credit on their personal income taxes, meaning 30 percent of the cost of their solar system purchase is returned during tax season. Many states also offer additional incentives of their own, making the purchase of a solar system for your home or business even cheaper.
With the financial support of both federal and state organizations, the United States solar market nearly doubled its annual record from 2015 to 2016.
Price per Watt
Solar power costs are commonly measured in dollars per watt to install a system. The exact amount varies by state, but most fall in the $3 to $4 range, with a national average of $3.57 per watt. The price you pay is then dependent on the size of the energy system you buy as well as the type of panel. Using the average price of $3.57/watt, a 5-kilowatt (kW) system would cost about $12,500 after the Federal tax credit.
Larger systems cost more to install, but also result in larger savings over time. After paying off the cost of your initial investment, a solar system’s savings go directly into your pocket by lowering your energy bills and overall electricity costs. An average household can likely break even in as little as seven years. The larger your solar system, the less dependent you are on a local energy provider for years to come. With a premium panel like SunPower, the expected life is 40 years.
Empowering the Coachella Valley
Renova Solar is California’s leading local solar system provider. Our solar system components are designed to stand up to the brutal desert weather conditions, meaning your solar panels and savings will last for decades to come. Renova even offers continued maintenance on all of our installed solar systems. Contact us today for a free quote for your home or business!