I hear solar’s a good deal. But what does that really mean?
First of all, let’s get clear on what incentives are out there for you to take advantage of because 70% off sounds too good to be true.
Cash incentives reduce the up-front, or out-of-pocket cost of your solar installation.
- Pacific Power
If you are a Pacific Power customer, you may qualify for an Energy Trust of Oregon cash incentive of $0.75 per watt, up to a maximum of $6,600, which is immediately taken off of the total cost of your system. That means less cash that you must come up with the install your solar system. This cash incentive will decrease throughout 2016. All our local solar contractor partners are Trade Allies with the Energy Trust of Oregon and will be able to tell give you the most up-to-date incentive amount.
- Central Electric Cooperative
If you are a Central Electric customer, there are no cash incentives available at this time.
A tax credit is a dollar-for-dollar reduction in the amount of income taxes you owe on either your federal or state income taxes. You must pay taxes in order to claim the credits.
Consult your tax professional to learn how tax credits and rules may apply to you. This information does not constitute tax advice and cannot be used to avoid tax penalties.
As a homeowner, you can file to receive a credit of 30% of your out-of-pocket cost on your federal taxes for the year that you installed your system. If you use the Energy Trust of Oregon incentive, the 30% tax credit will be applied to your out of pocket cost after the incentive is applied (30% of the total project cost less the Energy Trust incentive). You can check the federal tax credit application and requirements here. This is the big tax credit sometimes referred to as the ITC that recently got extended. This tax credited was going to expire at the end of 2016 and is now available until the end of 2019.
As an Oregon resident, you can also claim a state tax credit of $1.50 per watt, up to $6,000, for a system installed on your home or a second home in Oregon. You can claim a maximum of $1,500 per tax year for 4 years for the total of $6,000. This means that it will take you 4 years to get the full $6,000 back. Your contractor will help you fill out your state tax credit application. You can view the state tax credit application and requirements here.
Come again? What does this really mean?
Here’s an example of how these options and incentives work together for a standard 4 kW (or 4,000 Watt) system. This size system would consist of about 14 panels. This is a common system size in Bend that can provide anywhere from 20 – 100% of your home’s electricity use. How much of your utility bill is offset by solar will depend on how much energy you and your family use in your particular home.
Remember, you have to wait to file the federal and state tax credits with your taxes so you won’t get the credit back right away. The state tax credit will be filed $1,500 a year over the next 4 years.
This example is for educational purposes only; the actual cost of your system will be customized to your unique home.