Solar PV Rebates & Incentives: Federal and State – MA, CT, RI

Renewable Energy is becoming increasingly popular among homeowners, small businesses and large corporations alike, especially with sky-rocketing energy costs. Solar PV (photo-voltaic) is by far the most popular renewable-energy technology, but despite such popularity, Solar is not economically feasible for most people without government support.

Solar PV technology has a huge potential to provide if not all, but a bigger chunk of US electricity, which at this moment comes mostly from fossil-fuels, such as Coal and Natural Gas, as well as some Nuclear and Hydro power. Still, fossil-fuels provide most of our ever-rising electricity demand. While gas and coal are relatively cheap compared to other energy sources, they are polluting our atmosphere with ‘green-house’ gases. Also, due to rising energy demand, the cost of gas, coal and oil keeps rising, with no end in sight in the near future.

Solar, on the other hand produces clean, ‘free’ energy in the form of electricity, heat, and light. Although benefits of solar are enormous, so is the initial capital investment, which without additional incentives becomes not so attractive to the end user. Fortunately, the US government, as well as many other governments throughout the world see great potential and need in renewable energy, and offer end-users financial rebates and incentives to promote the spread of renewable energy. This in turn, reduces the cost of such technologies.

Here we will review rebates and incentives offered by Federal, State and local governments, as well as utility companies and other organizations in Massachusetts, Connecticut and Rhode Island (Note: Due to the recent budget deficit and slow economic conditions in RI, most of the State-sponsored renewable-energy incentives are temporarily suspended – we will keep a close eye on the situation and post updates as they become available).

Federal Tax Rebates for Solar PV: Commercial and Residential

Commercial Rebates

The Federal Government offers a Tax rebate for solar and other renewable-energy installed on your building. You can claim 30% Business Energy Tax Credit in the year of installation, and a 5-year accelerated depreciation thereafter. No maximum cap for Solar PV, while other technologies may have a limit.

Residential Rebates

For residential Solar PV systems, the Federal Tax Credit is 30% percent with $2000 cap.

Note: Current Federal Tax Credits for renewable-energy are set to expire on December 31, 2008. Unless they are renewed before expiration, Tax credits will be reduced to 10%.

Currently, Big-Oil companies receive over $1.5 billion/year in Federal Tax Credits from the US government for oil exploration and drilling in the Gulf of Mexico. These same companies had over $130 billion profit (net income after all expenses and taxes paid) in 2007. This money can be used to the advantage of the people of the United States in the form of a Renewable Energy Bill, which President Bush promised to veto, if it passes in the senate. We urge you to call your Senator, State Representative, Governor, and other officials as well as Presidential Candidates, and tell them that we, the people, demand support for renewable-energy.

State Tax Rebates, Incentives and Grants for Solar PV

Each State has a different Solar Rebates and Incentives Program, and to eliminate any confusion, we list them under each state’s respective page. These programs are designed for residents and businesses located in each state to take advantage of all the great benefits of Renewable Energy, and to help out the environment.

Massachusetts State Tax Rebates, Incentives and Grants for Solar PV

In 2008, Governor Patrick’s administration passed a new Solar Electric Photo-voltaic Initiative for the Commonwealth, which includes Solar rebates for residential and commercial Solar PV installations, as well as rebates for other renewable-energy technologies. This new program will allocate $68 million over the next four years (2008 – 2011). Here is a brief summary of rebates for Residential and Non-Residential (Small and Large Commercial, Non-Profit and Government) solar PV systems.

List of Massachusetts residential solar rebates:

Type of Rebate	$/Watt DC
Base Incentive	$2.00/Watt
PLUS: Additional to Base Incentive
Mass. made system components	$0.25/Watt
Moderate Home Value	$1.25/Watt
Moderate Household Income
Option A: Less than or equal to $91,552	$1.00/Watt
Option B: Less than or equal to $76,296	$2.00/Watt
Maximum possible rebate	$5.50/Watt

Moderate Home Value varies by county and ranges from $300,000 to $400,000. If your home value is equal to, or less-than your county’s Moderate Home Value (determined by municipality), you are eligible for this rebate.

County	Moderate Home Value
Berkshire, Franklin, Hampden, and Hampshire	$300,000
Bristol, Suffolk, and Worcester	$350,000
Barnstable, Duke, Essex, Middlesex, Nantucket, Norfolk, and Plymouth	$400,000

Massachusetts made system components: If any MAJOR component of your solar system was produced in MA, you are eligible for this rebate.

Official wording to qualify for this rebate adder:

To qualify for this adder, the Applicant must provide evidence that either the PV modules or the inverter(s), or another significant component are manufactured by a company with a significant Massachusetts presence as determined at the sole discretion of MTC and DOER. Current companies and products on this list are:

Evergreen Solar: modules

RWE Schott: modules

Satcon: inverters

Solectria Renewables: inverters

How to Calculate your Massachusetts Residential Solar Rebates:

For our example, we will use an imaginary Family – the Simpsons – living in the Bristol County of Massachusetts. Their home value is $279,000 as determined by their City’s Tax Collector Office. The Total Household Income is $90,000/year (which is above Mass. median household income of $76,296). The system consists of SolarWise PV and an Inverter manufactured in Mass.

They plan to install a 3 kW Solar PV system that costs $8 per watt. Total Cost of this system is $24,000 (3000 watts * $8)

They qualify for:

$2.00/watt – Base Rebate
$0.25/watt – Mass. made components adder
$1.25/watt – Moderate Home Value adder
$1.00/watt – Moderate Household Income adder
$4.50/watt Total Rebate ($13,500)

Their cost/watt is $3.50, and the total system cost is $10,500. They also qualify for a $2000 Federal Tax Credit, which reduces final cost to $8,500.

Now, their new system will generate an average of 4000 kWh per year. At an average cost of $0.19/kWh and assuming they will sell their REC (Renewable Energy Credits) for $0.06/kWh, this solar system will save the Simpsons $1000/year (~$83/month) in electricity costs, which they would have to spend anyway. At first, it seems like the pay-off period (or the ROI) is about 9 years. But if they finance that $8,500 with a 5-year Home Equity loan, with a 5% APR, their monthly payment would be $160.41. If we subtract the $83 reduction in electric bill from $160.41 we get $77.41 monthly loan payment for five years. After that, the new solar system will be paid off and will generate FREE electricity. Any reduction in the total system output (which is common with ALL solar modules, and for IB SolarWise PV it is about 1/2% per year or 10% over 20 year warranty period) is more than offset by the inflationary increases in electricity and energy sources’ costs.

Massachusetts Commercial and other Non-Residential Solar Rebates:

While total non-residential solar PV rebates in Massachusetts are less than those for residential solar, they still cover a major part of the total cost, and considering much more attractive federal tax credits, the ROI with any commercial solar PV system is higher than that of a residential one. Here we will not get onto complicated tax-related calculations, but bear in mind the 30% federal tax credit with no limitation, and the 5-year accelerated depreciation. With that you get the reduced electric bill and of course the state rebates. Bellow, is an overview of what you can qualify for.

Note: At this point, Federal tax credits for Solar PV on other renewable-energy technologies is set to expire on Dec. 31, 2008. We assume that once the presidential election is over, the Renewable-Energy Bill will be updated and renewed for another 8 years as was proposed in the 2008 Energy Bill, but never made it through the Senate. President Bush also said that he’d veto this bill if it passed the Senate vote. (PS, the bill passed in the House of Representatives, and was 1 vote short of passing in the Senate)

Non-Residential Rebates for Incremental Capacity ($/Watt DC)

Incremental Capacity:	1 – 25 kW	> 25 to 100 kW	> 100 to 200 kW	> 200 to 500 kW
Base Incentive	$3.25/W	$2.50/W	$2.00/W	$1.50/W
PLUS: Additional to Base
Mass. made components	$0.25/W	$0.25/W	$0.25/W	$0.25/W
Public building adder	$0.50/W	$0.50/W	$0.25/W	$0.25/W

For more information, directions, and step-by-step guides, visit the Commonwealth Solar Program which cover all aspects related to this topic in great detail, and we based this article on the information from there.

You can also read the Mass. Solar Program Handbook which is a detailed summary of Mass. solar rebates for residential and non-residential installs.

Connecticut Solar PV Rebates Overview

– Section Coming Soon

Rhode Island Solar PV Rebates Overview

Apparently, due to an excessive budget deficit in RI, there are no renewable-energy rebates available at this time. This is very unfortunate, and we try to do anything we can (which is not a lot, as this matter is in the hands of RI policy makers) to bring those rebates back. To find out what is being done, and how you can contribute to these and other renewable-energy initiatives, visit Apeiron Institute – a group of volunteers and activists of Sustainable way of life in RI and surrounding areas.

If you live or do business in RI, you are paying a Renewable-Energy charge on your electric bill. Fight for your right to access a State-sponsored Solar PV rebates program, to which you and EVERY customer of electric companies in RI contributes every month. Yet, your money goes somewhere else, while the National ‘Greed’ keeps on hiking your electricity rates. Contact the RI Governor and the members of state senate and tell them you want the Renewable-Energy Program back!

Conclusion

With these incentives in place and their availability through 2011, it actually makes sense for any business to have a solar PV system installed on their roof, and even more so for public entities, such as schools, city/town halls, etc. For an average commercial installation, a state rebate will range from $2.75 to $3.50 per Watt DC, and considering that the initial cost for larger, commercial solar PV installations is less than that of a residential system, it is a bargain!

With IB SolarWise PV system, the cost/Watt scales down as you increase the system size. This happens because all you do is add more solar panels, and some labor to actually weld those panels to the main IB roof, while most of the labor is on the electrical side of the installation: Connecting all panels to the Inverter, installing power shut-offs, generation meter, and connecting the system to the building’s electrical system and the main eclectic meter. Also, bear in mind that the Inverter is already there, so when you add more panels to the system, you do not need to add inverters, which reduces total cost/Watt even more (of course you need an adequate size inverter).

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