3 Solar Financing Options to Consider

Paying for your own energy sucks.

So why not just produce your own energy? Maybe you’re just considering ways to make your home or your community more energy efficient, and save some money. Either way, there are many different types of solar technology that create or save energy.

Small solar electric systems are becoming increasingly popular as a way to produce electricity for homes and businesses. Photovoltaic systems use sunlight to create energy. Excess energy can usually be sold back into the grid.

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Photo by: Mike Carter

Another ways to utilize solar power is a solar water heating system. Active systems have pumps that circulate water through plates exposed to sunlight on roofs and back into the home. Passive solar water heating systems are not as efficient, but can be more reliable and longer lasting. They work so that the water flows when warm water rises and colder water sinks into the tanks.

The cost of solar technology is also going down, due to investment and research by the government.

The Department of Energy’s SunShot Initiative is a national effort to reduce the costs of solar to $0.06 per kilowatt hour,” said a DOE spokesperson. “Yet,  it does not make funding available for individual solar projects, instead it focuses on innovations that will help make solar cost-competitive, whether that be making advances in technology or reducing market barriers, compared to other forms of energy.”

A main concern about utilizing these technologies is the expense of installing them. The government offers programs to help make the costs of producing energy or becoming more energy efficient feasible. State incentives vary, but can be found through the Database of State Incentives for Renewables & Efficiency. Here are three federal incentives for implementing solar technologies in your home or community.

1: FHA PowerSaver Loan Program

This is a program that incentivizes energy-saving renovations to the home by offering borrowers low-cost loans. These loans include up to $25,000 to install solar panels, along with other energy-efficient improvements.

To participate, you must have a minimum credit score of 660, and a one-unit, owner-occupied principal residence. To apply, contact an FHA approved lender.

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2: Residential Renewable Energy Tax Credit

The taxpayer may claim a 30% tax credit on expenditures of solar electric or solar water-heating property. These expenditures include labor costs, assembly and system installation and piping or wiring a system to the home.

This tax credit is decreasing gradually. It is a 30% tax credit for systems in place before 2020, 26% for systems placed between 2020 and 2021, and 22% for systems placed in 2021. The home served by the system does not have to be the taxpayer’s principal residence.

“I think that most importantly, there is certainty in it now,” said Doug Stingle, the development director for The Midwest Renewable Energy Association. ”The market knows what the rate is going to be in the next couple of years; some of that pressure has been relieved.”

3: USDA High Energy Cost Grant Program

This is a grant aimed for rural, local communities with expensive energy costs. Those who can apply include state and local governments, non-profits and for-profit businesses. Eligible areas must have an average household energy cost exceeding 275 percent of the national average, which is $0.33 per kilowatt hour.

The grants range from $50,000 to $3 million for activities including renewable energy facilities and other electricity generation facilities.

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