2024 Solar Incentives Guide for Sanford, NC - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Sanford?

Source: https://www.dsireusa.org/

The phrase "solar incentives" covers a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You might qualify for several kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the North Carolina government and others from the federal government. Categories of solar incentives include:

• Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when paying property tax on your home.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• Rebates: Solar rebates may be offered by your county or state, or by your local utility company. These rebates are essentially cash back that is applied after you pay for a solar system and before tax credits are calculated.
• Net Metering: Make sure you speak to your Sanford utility company about signing a net metering contract. This allows you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce more than a predetermined (usually small) amount of electricity can qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically given at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.

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Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of the cost of your solar system.

The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006, on a property you own for you to be eligible for the credit. Originally, the ITC covered 30% of all costs (panels, accessories, labor and equipment), although the covered amount has fluctuated slightly over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Talking to your local Sanford solar panel installation expert is the best way to learn more about how the ITC applies to your situation.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit. This amount will be decreased slightly on a yearly basis until the current program ends. Starting in 2023, it will also be easier to get credits for energy storage systems with the new act.

Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit applies to you, speak with your local Sanford solar installation company.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more can be offered at a more local level. Incentives might be provided by your county or municipality, or by the state of North Carolina. Some incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Sanford

Solar incentives might come from the North Carolina government, the federal government or your local utility company. The growing number of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. Talking to your local Sanford solar panel installation company is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.