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Green Collar Careers - Solar Heating Incentives

Solar heating systems have been granted some significant economic benefits to offset costs to a point where every electric water heater should be replaced TODAY!

Federal Government tax credit per IRS Home Energy Credits:

• Eligible Renewable/Other Technologies: Solar Water Heat, Photovoltaic, Fuel Cells
• Applicable Sectors: Residential
• Amount: 30%

With a typical solar water heating installation running about $8000 complete, the IRS has offered to chip in $2400.  Solar water heating property must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed.

State incentives are far more complex with a wide variety offered.  The Department of Energy has compiled a complete Database of State Incentives and Renewable Energy (DSIRE) that details incentives available state by state. 

Types of state incentives for solar water heating may include:

• Utility Rebates generally $500-$1000; may be a check from the utility or a credit on future electricity purchase
• Low interest no qualify loans up to 5 years
• Property Tax exemption for up to the life of the system (on the average solar water heating systems add 50% of installed cost to value of home)
• State income tax credits and deductions
• County tax credits

Just based on the IRS 30% tax credit the following shows a value proposition for the typical customer with electric water heating:

If the customer sells their home in say 5 years, they not only recoup the $3400 in tax benefits and electric water heater upgrade, the resale value on their home is increased by $4000.  Over that 5 years the solar hot water system produced the equivalent of $1863 worth of electricity.  The homeowner would see a "net profit" of $1263 after 5 years!

So what about the intangible value?  Homes with solar water heaters on average are on the market half as many days as homes with standard electric water heat.  Buyers want these homes, how do you put a value on that?