Paybacks and tax incentives

The rooftop solar industry scored a big win in the tax legislation approved by Congress in December 2015. The National Roofing Contractors Association (NRCA) joined the Solar Energy Industry Association in leading the charge to have the renewable energy investment tax credit (ITC), which provides a 30 percent credit for solar and other renewable energy projects, extended through 2021.

The ITC, originally authorized by Congress in 2006, had been scheduled to expire at the end of 2016. NRCA made the extension of the ITC a major focus of its legislative conference in October 2015, and the efforts of its members to lobby their senators and representatives paid off. The tax bill extends the ITC for five years with a phase-down in the credit amount in the final two years (click here to see a table of the credit amounts). The bill also includes improved language requested by NRCA and other supporters to allow the credit to be used upon the start of a project's construction rather than when the property is placed in service. The extension of the renewable energy ITC will provide long-term certainty to the rooftop solar industry and will help sustain and create an estimated 140,000 jobs. For more information about the ITC, visit www.irs.gov.

State and local utilities also offer incentives and rebates, such as The California Solar Initiative program and New Jersey's Renewable Energy Incentive Program, are available for business owners and homeowners. You should research local regulations and applicable rebate and incentive programs to be better able to inform your customers about their potential savings. Up-to-date information regarding incentives and policies can be found at www.dsireusa.org, The Database of State Incentives for Renewables & Efficiency. The website is updated regularly, and you can find state rebate and incentive information based on state and ZIP code.

In addition, be aware of feed-in tariff (FITs), state or local legislation that promotes the rapid deployment of renewable energy resources. A FIT offers a guarantee of payments to renewable energy developers for the electricity they produce. A homeowner or business that installs a rooftop solar system may meet the definition of a renewable energy developer. The requirements, terms and conditions for FITs are complex and often take years to develop. Market data supports that when a state passes reasonable FIT legislation, solar installations increase dramatically. Click here to read details about specific state FITs and similar programs.

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