In early October, President Bush signed a bill that extends the tax credits for solar energy systems and fuel cells to 2016. The 30% tax credit for residential Solar PV systems is currently capped at $2000. As of January 1st, 2009, the cap will be removed. This helps create a more significant positive incentive for Solar PV installations for homeowners.
For example, in New York, a 5kw Solar PV system costs approximately $45,000; $20,000 of which is paid by the State as part of their incentive program. The net cost for the Homeowner is reduced to $25,000. Currently, this $25,000 Homeowner provides a capped Federal Tax Credit of $2000, but as of January 1st when the cap is removed, the 30% Federal Tax Credit will be worth $8333. This significantly reduces the net cost for the homeowner.
There are additional tax credits and depreciation incentives for Solar PV installations that we'll cover in the near future.
