Solar Energy Credit

Published on 03/22/2011 20:59

Residential:

 

The California Solar Initiative offers cash back for installing solar on your home or business.  

 

The state of California offers the California Solar Initiative (CSI) which is currently paying a state rebate that covers up to 25% of the total system installation cost. In addition to the state rebate, the federal government provides for a 30% federal income tax credit on residential solar systems. By utilizing both state and federal incentive programs, the total system cost is reduced up to 50%. 

 

Business:

 

The state of California offersthe California Solar Initiative (CSI) which is currently paying a state rebate that covers up to 20% of the total system cost. In addition to the state rebate, the federal government has placed an initial 30% federal income tax credit on commercial solar systems. Business also can depreciate the adjusted basis over a 5 year period.

 

How much will my incentive payment be?

 

California Solar Incentive payments are currently disbursed in one of two ways:

 

 

 

  • Expected Performance Based Buydown (EPBB): The applicant receives the entire incentive payment at the time the system is installed, and the payment is based on expected electrical output of the system.
  • Performance Based Incentive (PBI): The applicant receives a portion of the incentive payment every month over a period of five years, and the payment is based on the actual metered output of the system.

Currently, only program participants applying for systems smaller than 50 kilowatts (kW) may take the EPBB payment. Beginning January 1, 2010, only systems smaller than 30 kW will be eligible to take the EPBB payment. Any systems eligible to take the EPBB payment may opt to take the PBI payment instead.

 

The EPBB payment and the PBI payment are intended to be financially equivalent. That is, the up-front payment disbursed to an EPBB applicant is the same after accounting for the time-value of money as the stream of monthly payments disbursed to a PBI applicant. The PBI payments are scaled up 8 percent a year compared with the EPBB payment to account for inflation and the lost return on an investment of equivalent risk.

 

Certain other rules and requirements apply and must be adhered to in order to be allowed the energy tax credits.


Apodaca CPA is an accounting firm based in Monrovia, Los Angeles County, California. We offer tax services, tax consulting and tax preparation services, bookkeeping services, business auditing, business financial services, corporate tax return services, Income tax services, inventory analysis services, non-profit accounting services, payroll processing services, financial services including pension plan management services, projection and forecasts services, cash budgeting and cash management services, education credits, energy credits and vehicle tax credits information and management.
Apodaca CPA provides accounting services, payroll services, personal and business consulting, tax solutions to individual entrepreneurs and small to medium size businesses in the cities of Monrovia, Arcadia, Pasadena, Altadena, Sierra Madre, San Gabriel, Duarte, Industry, South Pasadena, San Marino, Azusa, Covina, West Covina, Irwindale, Glendora, San Dimas, La Verne, Claremont, Burbank, Glendale and Los Angeles.