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The State of Delaware continues to support renewable energy for our citizens.  Starting in June a new low interest solar loan is available through the Energize Delaware program.  The interest rate is only 3.9% for qualifying homeowners, and can cover up to 70% of project cost.  Other solar incentives, such as the 30% Federal Investment Tax Credit, Green Energy Grant, and selling your Solar Renewable Energy Credits are all still available too.  Of course, the biggest savings for adding solar comes from drastically reduced electric utility bills you’ll have throughout the year.

The first step to see if you qualify is to contact us at KW Solar Solutions by calling 302-838-8400, or by submitting your information on our contact form here.  We can help answer your questions about solar and schedule a time to visit your home to conduct a site assessment and provide you a written proposal and price quote.  We can also help you apply for the Energize Delaware Solar Loan.

For additional information visit https://www.energizedelaware.org/residential-solar-loan.

Going solar is a great investment for your family and the environment!

A great way to help off-set the cost of your solar installation is the 30% federal tax credit.  It’s one way our country is supporting clean, renewable electricity generation.  We at KW Solar Solutions are solar experts, not tax experts so it would be wise to consult with a tax professional.  Here’s some information on how it works for residences:

• The federal investment tax credit (ITC) is a tax credit that can be claimed on your federal income taxes for 30% of the cost of solar PV systems. Use IRS form 5695 with your Form 1040.
• The amount of the tax credit is equal to 30% of the cost of all equipment, labor, permitting and inspection fees. For example, if your system from KW Solar Solutions was $20,000 than your tax credit would be [.3 * $20,000 = $6,000].
• Utility provided rebates and grants generally decrease your basis in the solar renewable property. The Green Energy Grant in Delaware is a utility provided grant.  For example, if your solar PV system cost $20,000 and you receive a $3,000 Green Energy Grant from Delmarva than your basis in the property for tax credit purposes is [$20,000  - $3,000  = $17,000].  Your federal ITC amount would be [.3 * $17,000  =  $5,100].
• There is no cap on the amount of the ITC.
• You need to have a federal income tax liability to take advantage of this incentive. If your employer withholds payroll taxes, you may receive much of that back since the ITC can offset what you owe in income tax.  So if you owe $6,000 in federal income taxes after you’ve taken all your deductions you could use the $5,100 ITC (from above example) to reduce your tax liability to only $900.   If your employer withholding is more than $900 you’d get the remainder back as tax return check.
• Any unused portion of the tax credit can carry forward to the next tax year. So if your income tax liability is $4,000 and your ITC is $5,100 you can carry forward $1,100 to next year.
• The tax credit can be used against the federal income tax or the alternative minimum tax.
• Payments you receive for Solar Energy Renewable Credits (SRECs) is taxable income and does not impact your ITC. KW Solar can help you determine how valuable your SRECs are.
• Your solar PV system must be ‘placed in service’ in order to qualify for the ITC. This means that installation is complete and the utility company has inspected the system and has given you permission to operate.  KW Solar Solutions helps expedite the process with our customers.
• You can get the ITC on both your primary home and a vacation home (not a rental home).
• If you expand an existing solar PV array you can qualify for the ITC on the cost of the expansion.

Commercial ITC is a little more complex, but still equals 30% of the basis in solar PV with no capped amount.  KW Solar works with commercial, non-profit and agriculture organizations to help sort through how the economics of solar can help them meet their goals.  Again, it’s always best to consult a tax expert to confirm how the tax credit applies in particular situations.

Converting your home or business to solar energy is great for your budget as well as the environment.   Total system prices vary widely and can be a significant upfront investment, however, you can expect to save 40% to 70% over its 30 year lifetime.

But what’s the best way to pay for your solar system?  Often the decision comes down to cash flow.  Do you have the cash necessary to purchase the solar installation?  Do you need any up-front money?  Do you need to borrow?  Below is an overview of the common approaches:

Purchasing provides the most savings and greatest overall value.  The rate of return is significantly higher than what you'd earn in the stock market and most other investments.  To help defray the cost you’ll receive a 30% Federal Tax Credit, earn Solar Renewable Energy Credits (SRECs) that you can sell as you produce solar power (or sell them up front to help finance the system), and get any state renewable energy grants available in your area.  Have your solar installer put together a cash flow statement covering 25 or 30 years to see the extraordinary amount of extra cash you'll have over the expected life of the solar panels.  The significant decrease in your electric utility bill along with the incentives mean the system will pay for itself in 6 to 10 years and then your electricity is free going forward.

Home Equity Loans are a great option to finance your solar PV system.  You’ll receive the same great benefits as above however, you'll pay interest to the bank.  Fortunately, the interest is tax deductible, and there is no penalty for early payoff.  Additionally, you’ll be selling your SRECs for cash which can be used to pay down the principal.

Home Equity Lines of Credit function the same as a home equity loan except that they are not term loans.

Solar Loans are another good option.  They are offered thru third party financial companies and are secured by the solar equipment.  KW Solar Solutions partners with Sungage, a trusted lender with flexible terms.  Be aware that the interest for these loans is not tax deductible.

Leasing and Power Purchase Agreements provide the lowest financial benefits to homeowners.  The overall savings is a small fraction of those earned by owning your solar PV system.  You won't receive the Federal Tax Credit; you can't sell the SRECs and you will not get any state renewable energy grants.  Plus, if you'll be selling your home in the future you'll have to find a buyer who is willing to assume the lease.  Sellers are often required to buy out the lease.  Great for the leasing company, not so great for you!

If you are considering leasing solar equipment from one of the national leasing companies such as Solar City, request that they provide you a quote for the full purchase price of their proposal.  In order to do a true price comparison, ensure the system size quoted is the same as that quoted by KW Solar.   Then, divide the total purchase price by the system size.   This gives you the price per watt of the system, which is the dollar amount educated consumers use to help them make their buying decision.  Then comparison shop for price, quality, warranty, made in the USA equipment, customer service, references, etc.  Please give locally owned solar companies special consideration.

It's a bright day for solar :)

Please call us with any questions at 302-383-8400 or email at info@KWsolar.net