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Solar Financing and Tax Incentives

Solar Energy Benefits, Financing, and Tax Incentives in Denver

Going solar is not just good for the planet, it's good for your family and finances. If you are considering powering your life with natural solar energy, consider the advantages of taking this important step:

Investing in solar energy is the same as investing in other home improvements such as remodeling a basement or modernizing your kitchen. Solar loans are similar to other home improvement loans, and as solar energy has become more popular, financial institutions and solar companies offer buyers easy payment plans over a fixed term with low, locked-in interest rates.

Financing your Solar Energy Choice

Solar loans generally give the borrower immediate ownership of the panels, so they can benefit from solar tax credits, rebates, and lower energy costs as soon as the panels are up and running. A good way to plan for the expense of installing solar panels is to average your electricity costs over a year and arrange for a loan with monthly payments that do not exceed your energy bill. 

Other ways to fund your solar choice are solar leases and power purchase agreements (PPAs). These choices mean a third party owns the panels and you pay a small, monthly fee to use the clean, green energy. Leases and PPAs are similar in that upfront installation charges are minimal, and maintenance is not your responsibility; it is up to the company that owns the panels to keep them in good working order. But these options have important differences that need to be factored into your decision:

  • With a lease, you will be charged a fixed monthly fee for renting the equipment.
  • With a lease with a purchase option, you pay a fixed monthly rental fee, but you have the option to purchase the panels at the end of the lease term. After purchase, maintenance is your responsibility.
  • With a PPA, your bill for power generated by the panels is well below market rates.

Leases and PPAs save customers between 10 and 30 percent of their usual energy costs. However, rebates and tax incentives do not go to you; they go to the company that owns the panels. 

If you do not have the cash upfront and do not want to commit to a lease, you may be eligible for an Energy Efficient Mortgage through the federal government and some financial institutions. Home buyers purchasing properties that meet eco-friendly standards may be eligible for special mortgages that reward energy efficiency. Upgrading your home may qualify you for special eco-friendly refinancing options. 

Solar Power Tax Incentives

If you own your solar panels instead of leasing them, you are entitled to an array of tax incentives. You already know your home will increase in value, but Colorado will not penalize you for improving your home with solar energy. You will not be taxed on the added real estate value due to solar panels and systems.

The government wants you to invest in solar energy and offers an incentive that many homeowners find motivating. The federal solar tax credit, also called an investment tax credit (ITC), allows to you deduct 30 percent of what you pay to install a solar energy system. Even better, there is no limit on your investment, meaning there’s no "cap." The IRS even says, “no costs relating to a solar panel or other property installed as a roof (or portion thereof) will fail to qualify solely because the property constitutes a structural component of the structure on which it is installed.” And “The home doesn’t have to be your main home.” So, go ahead and invest in solar for your kids, parents or your neighbors!

Colorado has some of the best solar rebates and tax breaks in the country. You will get paid for all of the extra energy you generate thanks to net metering. Many Colorado utilities and local organizations offer cash rebates to homeowners who install solar panels. 

Colorado is a leader in renewable energy. Programs, rebates, and tax credits are moving with the growth of households embracing clean energy. At Photon Brothers, we are committed to providing the best installations in the business, and we have 8+ years of experience and veteran installation technicians. We know the business, the tax breaks and rebates, and local opportunities both present and emerging. We know how to make solar energy work best for you. Please give us a call to discuss your solar energy options for today and for future planning.

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