Federal rebate on solar install

[snic]

As I said, very generous.

Here in NY it's just over $1/watt rebate (comes from a state agency that all utilities pay into), plus up to $5,000 state income tax credit. In my case, for a similarly-priced system (gross price about $24k), that puts the total discount at somewhat less that what you got. On top of that, the state income tax credit is a rose with a significant thorn: if you itemize deductions, you will end up deducting less state income tax the next year.

And on top of that, my similarly-priced system is just over half as large, in terms of DC watts, as yours. Labor etc is more expensive in NY, but still it seems to me that you got a great deal. (Or I got a crummy one!)

[Kenstl]

Snic

I live in MO, Ameren is the utility company and they are paying a rebate of $2/watt in exchange for a net metering agreement. Below is an quote from their website on a Q&A section. Our electric is pretty cheap here at .10 kw, so without the rebate, I would not be looking at solar due to the cost of the system. With the rebate and federal 30% credit, the quotes I received had a fairly large range but the pay back period gets down to 4-7 years (depending on total price, and what actual electric costs will be over the next 5 years, etc.)

"What will Ameren pay me for generating excess power?
Full retail credit is granted only up to the customer's actual usage during a month; any generation contributed to the grid above the customer's actual usage is credited at Ameren's wholesale rate. Currently, the wholesale rate is $0.0269/kWh from June through September (summer) and $0.0218/kWh from October through May (winter). A credit is issued to the customer on the electric bill for excess power produced each month.

Are there any rebates or programs available to customers for renewable projects?
Ameren Missouri customers may be eligible for a $2/watt solar rebate on systems up 25 kW or a maximum of $50,000 rebate. The solar customer's renewable system is required to be net metered. Find more on rebates and funds."

[snic]

Just curious where you live. $2/W rebate is pretty generous. Does that come from the utility company, the state, or ... ?

[Kenstl]

Great, thank you for the replies, that clears up my options.

[GridGrants]

No rebates on free money is what they say

And that is a succinct way to remember it. I had an accountant tell me earlier in the week that you will know how to treat it based on whether or not they send you a 1099. If you receive a 1099... include the amount in the cost of the system, take the 30% credit and report the 1099 amount as other income. If you don't receive a 1099, you have the option to do it either way... count it as other income and add it to the system cost or just forget about it, but make sure you don't include it in the cost of the system.

[russ]

No rebates on free money is what they say

[Volusiano]

I'm no accountant, but the way it's been explained to me, if you include (add on top) your utility rebate to your project cost and claim 30% tax credit off of the project cost, then you need to file the rebate as your taxable income as well. If you don't include your utility rebate in your project cost, then you don't need to file the rebate as taxable income.

So basically if your tax bracket for your income is less than 30%, then it probably makes more sense to include the rebate in your project cost. Then you get 30% discount on the rebate but pay less than 30% income tax on it.

And vice-versa, if your tax bracket is > 30%, you don't want to include the rebate in your project cost to avoid paying more than 30% tax on it.

[Kenstl]

Hi Everyone

I currently have a quote for the system listed below. My usage is 13,500 kW a year at our home. My question is regarding the federal tax rebate. Probably a question for an accountant, but is it correct that I should figure the federal credit at 30% off of the figure after taking the electric company rebate vs the whole project cost?

Thanks

--------------------------------------
PROPOSED PV EQUIPMENT
PV Modules: ReneSola Virtus II 156 Series Polycrystalline 255 Watt Modules. See attachment. High efficiency, UL-listed modules that have a 25 year linear power output warranty by a major solar manufacturer. The performance guarantee starts with a performance guarantee of 97.5% through year 1 and an 80% performance guarantee at year 25. 10 year warranty on material and workmanship.
Inverters: ReneSola Replus-250A Microinverters. These inverters also have a 25 year warranty versus the typical 15 year inverter warranty.
PV System Mounting Equipment: SnapNrack Series 100 Roof Mount System.
PV System Monitoring Equipment: Micro Replus Gateway Monitoring System.
- 8.67 kW estimated installed power capacity (direct current, standard test conditions)
- 34 modules and 34 microinverters.

Cost:$25,570 for 8.67 kW or $2.95 kWh
Amren
Rebate $2.00 or $17,340 which brings cost to $8,230
30% federal $2,469 (or can this be 30% of the total cost of project?)
Out of pocket $5,761