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2012 continues the very popular residential Solar Federal Tax Credit first enacted in 2009.  The previous solar tax credit program was capped at $2,000.  With the new one one, you can claim up to 30% of solar power costs for a new solar electric system. Existing homes & new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify. Expires: December 31, 2016

This Solar Federal Tax Credit especially well when coupled with a state rebate program. (CA, CT, NJ, NY) Also look for city solar incentive programs, that can also save you money on your solar panels.

On the tax credit, existing homes & new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify.

This Solar Federal Tax Credit reduces the amount of tax you owe. The credit is a reduction of total income tax at the bottom of your tax return. This tax credit is a non-refundable tax credit. Consult your tax adviser for details about solar power. Use it or lose it!

Example Solar Electric System cost with Rebates

A 3kW solar electric system costing $24K would get $5K in California state rebates and $7.2k Federal rebate. Final price $11.8k.  System payback time could drop to 6-7 years.  Rebates vary depending on location of course. Rebates make solar power Very attractive!

This Solar Federal Tax Credit is not affected by the AMT or Alternative Minimum Tax.

Interested in Solar Energy? Read our articles on solar power:

• Are Solar Panels for Me?
• Solar Panel Installation - Planning
• No money down Solar Panels
• Solar panel cleaning

This program may have its funding slashed by 40% shortly, so get in now if you have been thinking about it. Go solarSF helps San Francisco residents acquire discounts on Solar panel installation in San Francisco.  There is a GoSolarSF rebate of $2000-6000 and a firm that helps people collectively buy panels at lower prices.  A 2Kw system for $6000 after rebates instead of $18,000. Pretty sweet.

Make sure you factor in any city permit or contractor installation fees.  Also consider fixing any roof problems before you add solar panel.

San Jose Solar Discount

Let’s face it, solar panels are great but very expensive. The nonprofit Bay Area Climate Collaborative has set up a new program called SunShares that allows employees of participating companies and credit unions to buy solar panels at the significantly discounted price. San Jose city workers have a group by program of their own, that allows them to buy top rated SunPower solar panels at more than 40% off. Financing is available from the San Jose Credit Union.

They are looking for other municipalities and businesses to participate, so be sure to contact them.

Be sure to read our article: Are solar panels for me?

Costco.com now shows several solar power kits from Grape Solar starting from $3599.99 for a 880 W expandable grid tie solar kit.  There is a 5 kW kit for $17,999.99. Professional installation is a must unless you are really gifted. Grape Solar has a network of over 5,000 installers who will be available to provide local customer support. This kit is eligible for the 30% Federal solar tax credit and possibly state and local utility rebates, making it a pretty good deal.

Costco had a limited time special discount on Solar electric systems for Arizona, California, Colorado, Hawaii, and Oregon for Costco members back in 2009, that may be available in your area.

A typical system priced 1/10/2009 for Colorado:

$ 9,697.22 Solar Equipment – 3Kw system
$13,162.97 Installation
————-
$22,860.19
- $10,780 Colorado rebate
————-
$12,080.19 Costco Member purchase price

Possible additional savings:
- $92.40 1% rebate from Amex TrueEarnings Card
-$184.80 2% Costco Executive member reward
-$3624 Federal Tax credit
————-
$8178.99

Pretty sweet deal!  Check with your local Costco and tax adviser for your current special deal.

Thinking about solar – Are Solar Panels for me? helps you decide if they are right for you.