How to Get Paid with Solar in 2023
With the increasing popularity of solar energy, more and more homeowners are turning to solar as a way to save money on their energy bills while also reducing their carbon footprint. But did you know you could also get paid with solar energy? We’ll show you several options that homeowners can use to get paid with solar: The Inflation Reduction Act 2022, the Federal Tax Credit, Net Energy Metering (NEM), and up to $2,000 off new solar system installation.
#1 Inflation Reduction Act (2022)
The Inflation Reduction Act of 2022 (IRA) may be the most important pro-solar law Congress has passed. This is a proposed bill that aims to reduce government spending to control inflation and address the federal budget deficit, which includes new and revised tax incentives for clean energy projects.
According to White House projections, it will:
- Save families that use the bill’s tax incentives more than $1,000 each year.
- Enable 7.5 million families to install solar on their properties.
- Create millions of good-paying jobs.
Further, Rewiring America estimates that families could save $1,800 each year with an electric heat pump for HVAC and hot water, an electric vehicle, and solar panels.
The IRA restores and extends federal solar tax credits.
#2 Solar Federal Tax Credit (ITC)
The Federal Tax Credit, also known as the Investment Tax Credit (ITC), is a federal incentive that allows homeowners to claim a tax credit for a portion of the cost of installing a solar panel system on their property. The tax credit is calculated as a percentage of the cost of the system, and the percentage varies based on the year the system is installed.
If you have purchased a solar photovoltaic (PV) system in the last year, you could be eligible for this incentive to lower your tax bill. For example, you can receive a credit of 30% for the cost of the equipment installed during tax years 2022 through 2032.
The credit covers the following items:
- Solar PV panels or PV cells
- Solar energy storage devices
- Installation equipment, such as wiring, inverters, and mounting equipment
- Labor costs of the installation, including inspection, permission, and developer fees
- Sales taxes on eligible expenses
#3 Solar Credits under NEM 2.0 vs NEM 3.0
Net Energy Metering (NEM) is a billing arrangement that allows homeowners with solar panel systems to receive credits for excess energy their system generates and feeds back into the grid. Under NEM 2.0, homeowners receive a credit for the excess energy their system generates that is equal to the retail rate of electricity. Solar energy homeowners can use these credits to offset the cost of the energy they use from the grid.
Currently, under NEM 2.0 you get more value from the credits you receive for the excess energy you create. Unfortunately, this is about to change on April 13, 2023. NEM 3.0 will reduce the value of the credits by around 80%.
Under NEM 3.0, homeowners will be switched to a Market-Based Credit. Market-Based Credit will allow homeowners to sell their excess energy back to the grid at market rates. Each utility has it’s own calculations on what customers will receive for compensation.
You can be grandfathered into NEM 2.0 by submitting an Interconnection Application for your solar system before April 2023. We’ll help with your submission. Contact us today to get started before the deadline!
#4 Up to $2,000 off a New Solar Installation
On top of all these incentives, SolarTech offers new clients up to $2,000 off their new solar installation, helping them achieve energy independence. You can receive a free quote by contacting one of our experts and seeing how much you will be saving on your new solar system.
Solar energy is one of the smartest investments for homeowners looking to not only start saving money on rising utility bills but to even earn it back and reduce their carbon footprint for a more sustainable world. Make the best use of these incentives, as many of them are time-sensitive and can change.