Federal and State Tax Incentives for Solar System Installations
There are federal and state tax incentives for installation of solar panels, whether they are intended for converting solar energy into electrical energy or for hot water application. The federal tax incentives are uniform within the continental United States, Hawaii, and Alaska. State tax incentives vary from state to state. According to Solar Home Product Inc., the state of California just dropped the commercial solar rebate from $2500 in 2007 to $1800 per kilowatt in 2008. However, the solar rebate for residential customers currently in California is $2500 per kilowatt.
For a limited time, a 30 percent federal tax credit was in effect for residential customers, but there was no cap for commercial installations. However, this federal tax credit expired at the end of 2009, according to Solar Home Product Inc.