Solar Tax Credit 2018 - Everything You Need To Know

Solar Tax Credit 2018 - Everything You Need To Know

Get 30% from your federal taxes!

The federal solar tax credit, also known as the Investment Tax Credit (ITC), allows you to deduct 30 percent of the cost of installing a solar energy system from your federal taxes. The ITC applies to both residential and commercial systems, and there is no cap on its value.

When you purchase your solar panel system, the cost of going solar includes any other improvements needed to facilitate the installation of a system. Meaning, if any electrical work, roofing, or energy efficient upgrades are made, you can add these additional costs as part of the total ITC. Inturn, receiving a 30% tax deduction on the total cost of all improvements.

In previous years, owners of new solar energy systems could not claim the tax credit unless their system was operational. Now, the legislation allows owners to claim it as soon as the construction of the system is complete.

Do I qualify for the solar panel tax credit?

There are 2 options - Buying & leasing. The ITC applies to anyone who purchases their solar energy system. If you don’t have enough tax liability to claim the entire credit in one year, you have the ability to “roll over” or spread the remaining credits into future years to suit your needs for as long as the tax credit is in effect.

However, if you sign a lease or PPA then you will not quality for the ITC.

How do I claim the solar panel tax credit?

When you file your yearly federal tax return, let your accountant or tax service preparation representative know that you’ve gone solar in the past year. They will handle it for you. Or, if you chose to file taxes on your own, you will need to complete IRS Form 5695, “Residential Energy Credits,” and include the final result of that form on IRS Form 1040.

The IRS Form 5695 calculates tax credits for a variety of qualified residential energy improvements, including geothermal heat pumps, solar panels, solar water heating, small wind turbines, and fuel cells. 



In the morning, shut the windows and blinds to capture the cool air.

In the evening, turn off your cooling system and open your windows.


Smart thermostats are "SMART" because they connect to your WiFi network and allow you remote control access.

They can also automatically set the temperature based on a schedule in order to conserve the most energy.

Experts recommend keeping the inside temperature to 78 degrees. 3 – 5% more energy is used for each degree lower than that.

Automating your home's temperature with a smart thermostat helps you AVOID COSTLY ENERGY BILLS.


Filters get dirty, which means the system has to work overtime in order to push out cool air.

Make sure you stay on top of changing the filters so that when a heatwave hits, your HVAC system is not using excess energy to cool down your house.

ATTENTION Residential Contractors & Developers

ATTENTION Residential Contractors & Developers

IF YOU are a residential contractor or developer in California, you should be aware of the following: According to the CA Solar & Storage Association, California is taking its goals for zero carbon homes and buildings seriously. Implementation is already underway and the California Energy Commision, i.e., CEC is now turning its attention to making all new commercial and multifamily buildings zero carbon by 2030. We are happy to help you with your solar needs, contact us today for a FREE quote.

Attention Southern California NEM-2.0 Residential Customers

Attention Southern California NEM-2.0 Residential Customers

If you have recently received a notice or phone call from SDG&E about getting switched to a new rate plan. Here's why & this is what you need to do:
Over the next few years, the "Investor Owned Utilities," ie. IOUs will roll out and default to "Time Of Use,” ie. TOU for all residential customers. The CPUC is very interested in getting everyone on TOU however, state law prevents it from being mandatory out of concern for the impacts on low-income families. Therefore, it is currently set up to default, meaning that everyone gets switched unless they ask not to be.
Not all customers are affected by this yet but the IOUs are testing rate schedules and the process of switching customers onto them, in turn, these “default TOU pilots” are now getting underway.
Each of the IOUs have sent notices to test batches of customers saying they will get switched to a different rate plan if they don’t act. As you can imagine, they make TOU sound attractive and play down the option of staying on non-TOU rates. For example, see this web page that SCE set up for its default TOU pilot.
Please understand that the existence of this transition does not impact the grandfathering status of NEM-1 customers. Mandatory TOU for residential solar customers is part of NEM-2. Because NEM-1 customers are grandfathered from the changes that were made in NEM-2, they are exempt from mandatory TOU for the first 20 years of operation of the solar system. They can opt out of a TOU pilot now, or if they get switched and want to switch back they can do that as well.
Here are the rates that are in the pilot. Because they all have evening peak, it is likely that solar customers will be better off on non-TOU rates (E1 for PG&E, D for SCE, and DR for SDG&E). If they are part of the pilot pool and want to stay on non-TOU, they will have to tell the utility company they are affiliated with.
The timing of the rollout of default TOU for all customers, beyond the pilots, has not been decided. SDG&E has proposed to do it between March and December 2019. SCE and PG&E propose to begin in October 2020. If you have a lot of installed residential customers, you can expect to get some calls now and a lot of calls during the full rollout.

The different Econonmics behind netmetering: nem 1.0 vs nem 2.0

With NEM 1.0 coming to a close it is time to examine the economics of going solar under the new NEM 2.0 policy. The following is an excerpt of an article that was detailing the differences between the two policies: 

Under a January regulatory decision, new net metering customers will be able to keep retail rate remuneration for energy exported to the grid after the cap is hit. But they will also pay a one-time connection fee between $75 and $150, a non-bypassable charge from $0.02/kWh to 0.03/kWh, and will be switched to time-of-use rates.

As you can see there is not much difference between the two and will still make going solar one of the best investments a home owner can make.