How To: Take Advantage of Solar Tax Credits Before They Expire

The federal solar tax credit is stepping down over the next few years. If you’re a home or business owner you should be thinking about moving quickly to take advantage of the savings the tax credit offers.

Homeowners must have permission to operate their system by their utility company, which is the last step in your solar installation, by December 31 to receive that year’s tax credit.

The IRS states the system must be fully operational, or “placed in service.”

 

 

The tax credit drops from 30 percent in 2019 to 26 percent in 2020 and 22 percent in 2021.

Read more about the Federal Solar Tax Credit Phase-down for Residential Solar Energy Systems from the Solar Energy Industries Association here. 

Get started with a free, no obligation solar estimate to find out about the benefits of clean, affordable solar energy!

What is the 30% Federal Tax Credit?

Otherwise known as the Investment Tax Credit, the Solar Tax Credit allows you to deduct 30% of the cost of your solar system from your federal taxes.  

Put simply: if you spend $20,000 on your solar system, you pay $6,000 less in taxes when you file. The tax credit is different than a refund or a rebate. This means that you have to owe taxes to claim the credit. If the credit is larger than your tax liability in the first year, the remaining amount can be applied the next year. Generally, all expenses included in the quote you receive from your Solar Consultant can be included in the deduction. There is no cap on the value of the credit, and it is available to both residential and commercial customers. Every tax situation is different, however. Here is the tax form for you to bring with you when you meet with your accountant or finance professional. 

Buying A Solar Home Checklist

Congratulations!

Maybe you bought or are thinking about buying a home with a solar energy system. We’re not surprised. With the growing popularity of solar, you may encounter solar on some of the houses you see.  

So, what do you need to know when considering buying a house with solar? If the previous homeowner owns the solar array, they will be transferring all the benefits to you. These benefits come in the form of reduced electric bills and clean, renewable power. You may pay a little more for the home itself due to the increased home value that comes with solar. But, think about it this way: would you rather pay $200,000 for a home with electric bills that cost $300 per month or $225,000 for a home with electric bills $50 or less.  

New-To-You Solar Homeowner Checklist  

 

1. Get Educated About Solar 

Because you didn’t purchase the solar yourself, you didn’t go through the solar buying process that would have educated you on the many facets of solar homeownership. Here are a few resources to get started: 

 

 2. Learn About Your New Solar Array 

How old is the solar system on your new home? What type of solar panels make up the solar array? How much is it worth? We recommend requesting the following documents from the company that installed the solar energy system to find answers to these important questions.  

  • The original quote or contract for your solar energy system including the scope of work, equipment, sale price and warranty information.  
  • The built drawings of your solar energy system.   
  • Information about the specific equipment that makes up your solar system.  
  • With the help of the previous homeowner or your solar installer, learn how to log in to your online monitoring platform to track the performance of your solar array. 

 

 3.  Set up Solar Renewable Energy Credits in Your Name  

Solar Renewable Energy Certificates or SRECs (pronounced “ESS-rek”), are annual credits for the clean electricity produced by your solar PV system. They represent “the renewable energy attributes” associated with one megawatt-hour of electricity produced by your system each year (one megawatt-hour is equal to 1,000 kilowatt hours of solar). 

A general rule of thumb in Ohio is 1kW of solar capacity will produce approximately 1 SREC per year.  Therefore, a 5kW solar PV system will produce about 5 SRECs per year and a 10kW system will produce about 10 SRECs per year. 

When you buy a home with a solar system, the SREC certification, registration and agreements are transferable to the new owner. To do this, the SREC broker who currently holds the account will need the contact information of the new property owners and associated closing documents showing the transfer of ownership.  

There are different buyers, brokers and aggregators to choose from to sell your SRECs.  Third Sun Solar suggests Knollwood Energy, or Sol Systems to our customers. 

 

4. Add your solar system to you homeowners insurance 

Using the information you’ve collected, add your solar energy system to your homeowner’s insurance. This is a good way to protect the system in the case of damage. 

 

5. Switch your interconnection agreement 

Give your solar installer a call and ask them to switch the name on your interconnection agreement with the Public Utility Commission of Ohio (or your states Public Utility Commission). 

  

Interested in more?  We are always willing to help you with any questions you might have about your new solar array. Give our office a call and we’ll set up a time for you to talk to knowledgeable people. 1-877-GO-SOLAR

 

 

 

Working With Your Homeowners Association

The History of Solar + Homeowners Associations

In some neighborhoods, a homeowner looking to install solar must get prior approval from their Homeowners Association (HOA).  When it comes to addressing solar proposals from homeowners, the HOA will typically rely on its restrictive covenants, or “deed restrictions” to guide their decision making.  Covenants describe how a property can be used and what can be built on it.  HOA’s use this tool to maintain uniformity and aesthetics in a neighborhood.To begin the approval process,  submit a proposal to the HOA architectural review person or committee.  Sometimes the entire HOA board will vote to approve or disapprove a proposal.

HOA deed restrictions often do not address solar panels. The documents were written many years ago when residential solar wasn’t as common as it is today.  So, in most cases, one will find that HOA deed restrictions do not include language that prevents solar.  However, this does not mean that HOA boards will approve solar projects.  There may be hesitancy by the HOA board to approve anything that is deemed to alter the “uniformity” of the neighborhood.  Some HOA’s have restrictions on roof color which solar panels may not conform with.  Even without roof color restrictions, HOA’s may see solar panels as altering the uniform look of the neighborhood.

Besides the issue of uniformity, HOA’s can typically block solar panels by invoking a clause in the deed restrictions pertaining to “aesthetics”.  Since this is subjective, HOA boards can simply say that the panels will detract from the aesthetics of the neighborhood.

 

Before submitting your solar proposal to your HOA:

 

1. Become familiar with the HOA restrictive covenants.
    • Is there any language that is specific to solar panels?  If so, are there certain restrictions or guidelines?  If not, is there language regarding maintaining neighborhood uniformity?
    • What is the HOA approval process for home improvements?  Can the HOA reject a proposal solely for aesthetics reasons?
2. Develop a proposal for the homeowner that addresses the possible HOA concerns.
      • If aesthetics and/or uniformity are a concern, consider: all black panels and/or careful placement of panels ( to make sure design layout is optimal from an aesthetics standpoint)
3. If you think immediate neighbors will be supportive, talk to the them so that this support can be included in a proposal letter to HOA. HOA boards may be fearful of backlash from neighbors, so if homeowner has spoken with them and has their support, this will be beneficial.

 

4. Find out what other neighborhoods nearby are doing with regards to solar.
    • Talk to other HOA’s in the area. Contact information for HOA presidents may be available from the city in which the neighborhood is in.  For example, the City of Powell, OH has a list of contact information for all 29 HOA’s in the city.
    • Are HOA’s in the area allowing solar? If not, what restrictions are in place?
    • Are there any solar homes in surrounding neighborhoods?
    • There is a chance that not many HOA’s will have experience dealing with solar. However, this also means that there is a high probability that no HOA’s in the area will be restricting solar.  This fact can be highlighted when the homeowner submits a solar proposal to the HOA.  If other nearby HOA’s are not restricting solar, this may influence the homeowner’s HOA to allow solar to go forward.

After submitting your solar proposal to your HOA:

After submitting proposal to homeowner, have the homeowner provide proposal along with a letter that he/she writes to the appropriate HOA architectural review person/committee, etc.

  • Points to consider including in this letter:
    • Reasons for wanting to go solar (electricity cost savings, making an investment in the home, environmental stewardship).
    • Make note of research showing substantial increase in home resale value for solar homes. This point is crucial, since the aesthetic concerns of HOA’s typically stem from concerns about neighborhood value.
    • Briefly show data regarding environmental benefits (i.e. emissions avoided: equivalent number of trees planted, pounds of coal avoided, miles driven by car avoided, etc.). Check out this EPA Calculator tool to do this.
    • Discuss any findings from talking to other HOA’s. Your proposal will be strengthened if the letter can state that “other nearby HOA’s are allowing solar” or “of the HOA’s I contacted, none have any restrictions on solar” .
    • Solar is becoming more common and widespread, so this is an opportunity for the neighborhood to set a precedent — with a reputable solar firm who will ensure the installation maintains the aesthetics of the neighborhood. In other words, present this as a chance for the HOA to set a high standard for solar in the neighborhood.
    • Consider proposing a set of solar guidelines that the HOA can use if desired. This may make it more palatable for the HOA to approve a solar installation if it knows that certain standards will have to be followed going forward.  The HOA may be ok with the solar proposal of the current homeowner with regard to aesthetics, etc., but is concerned that this will open the door to all types of solar installations that may not be done as well by other homeowners.  Northwest Solar Communities has developed residential solar guidelines that can be used as a template for HOA’s.  Guidelines may need to be modified somewhat – i.e. take out language regarding ground-mounted solar, etc.
    • Stress at the close of the letter the desire to work closely with the HOA.
    • Provide contact information for yourself and your Third Sun Solar Consultant for any questions.
  • Offer to present proposal to the architectural review committee/board.
    • Consider bringing in a panel to show, but know that it will look quite large up close compared to what it would look like on a roof from ground level. This may actually be more of a negative to show the panel up close.
    • In presentation, show photos of high quality residential installations. Your Solar Consultant would be happy to provide you with photos to use.

If your solar proposal is not accepted…

If HOA does not approve the solar proposal, homeowner may consider obtaining a supportive opinion letter form an attorney that addresses concerns brought up in the HOA restrictive covenants.

  • This letter can describe how the solar proposal is in line with the HOA restrictive covenants and can speak to specific concerns raised.
  • The point of the letter is not to appear as a threat of possible litigation against the HOA. Rather, it is to provide a supportive legal document to facilitate the HOA approving of solar.
  • Note: this step can be taken prior to initial submission of proposal to HOA, but will add to the total cost to the homeowner and possibly be an unnecessary one.
Homeowner may consider modification of HOA restrictive covenants.
    • Often this entails obtaining approval from 75% of homeowners in neighborhood.
    • One possible approach is to circulate petition in neighborhood for approval of solar guidelines (as mentioned above).
    • The HOA attorney will need to write an amendment to the restrictive covenant.
    • Prior to petitioning the neighborhood, send out email to neighborhood explaining the petition process and attach the proposed amendment, sample guidelines, etc.
    • Likely most successful approach is going door-to-door in order to facilitate in-person conversations.
    • Along with petition, take around copies of proposed amendment documentation, proposed solar guidelines, and rendition of homeowner’s house with panels.
    • If petition is successful, HOA board will need to formally adopt amendment to restrictive covenants, then submit documentation with county recorder.
    • Homeowner will now be able to resubmit solar proposal.

Building a Solar Ready Home

If you’re building a new home, you have the opportunity to build it with energy efficiency in mind. Energy smart choices will save you time and money in the long run. 

Tips for building an energy efficient home:  

  1. Work with a contractor who has built low-energy homes in the past 
  2. Use Energy-Star rated appliances, windows, and insulation.
  3. Super insulate your attic and sealing ducts  
  4. If you’re going solar, consider an electric stove and/or water heater
  5. Select highly insulated windows and doors 
  6. Use large south facing windows to bring heat into your home during the wintertime (and cover with shades to cool in the summertime) 
  7. Install energy efficient lighting 
  8. Power your home with the sun!  

Planning for Solar: 

  • Identify local requirements: Some homeowners associations, historic preservation districts and communities have special solar zoning requirements. Get up to speed by researching local zoning rules and regulations.  

Designing for Solar 

  • Position your home with solar in mind: If you want to power your home with solar, the most important thing to consider is positioning. A south facing roof is ideal for solar panels to capture the most sun. On average, east and west rooftops capture a little less of the suns energy. 
  • Roof angle: A roof pitched between 30 and 45 degrees is ideal for solar in Ohio.  
  • Roof truss: spacing of 4 feet or less.
  • Roof Material: We can mount panels most cost-effectively, with no roof penetrations, on Standing Seam Metal.
  • Conduit run: of 250 feet or less for solar electric lines.
  • Built-in metal conduit: from the attic to a location near the electrical service panel— typically 1-inch conduit.
  • Large service disconnect: as a point of connection for solar.
  • Minimize roof obstructions: Keep solar panels in mind when designing where to put vents and other roof attachments, like dormers and chimneys.  
  • Load Bearing of the roof: Make sure that your roof will be able to bear the additional weight of a solar energy system.  
  • Consider landscaping: For solar to work well, sunlight needs direct access to your roof. Think about the placement of your home in relation to trees and other landscaping that could cast shadows on your solar arrays.  

Work with your solar installer from the beginning. 

Once you’ve decided to include solar in the plan for your new home, give us a call. We’ve worked with many people who are building a new home and interested in installing solar. We know all the tricks. We’ll even create a plan with your contractor.  Third Sun Solar offers zero down to homeowners, which means you don’t have to bear the brunt of high upfront costs. You start saving money from day one.  

Our Portfolio  

We have worked on many energy efficient homes in Ohio. Last year we installed solar panels on a home in Cincinatti, Ohio, that achieved LEED Platinum certification. This residence is equipped with solar panels and geothermal. Learn more about LEED accreditation here. Third Sun Solar is a proud member of the US Green Building Council, the accreditation body for LEED certification.   

Snowfall and Solar Systems

If you’re considering going solar, you might be wondering if cold and snowy midwestern winters should affect your decision. This is one of the most asked questions we get.  Third Sun Solar has 19 years of experience installing systems on all types of buildings across Ohio. To date, our portfolio includes nearly 900 installations in the mid-west. These folks didn’t let our cold winters or snowfall discourage them from going solar, and you shouldn’t either!    

Can my solar panels produce energy if they are covered in snow? No, a solid covering of snow all but shuts off production.  The good news is that overall production loss from the snow is very small when looking at performance on an annual basis. Losing a day of production in January is a fraction of a day in July.  Here at Third Sun Solar, our team takes winter’s shorter days, snowfall and the orientation of sunlight all into account when estimating the output of your system. 

Residential Solar System Covered in Snow

Depending on the tilt of your roof and the slant of your panels, snow will typically slide off on its own. Even in the heart of winter solar panels give off a small amount of heat, which helps to warm and melt the snow. Additionally, snow on the ground can reflect light, amplifying the sunlight absorbed by your solar panels. During sunny winter days, the sun will warm the dark solar panels and the snow will melt and snow will typically slide off the smooth surface. An added bonus? Cleaning the panels won’t be necessary, snow can get this job done easily!  

Are cold temperatures bad for my solar panels? Unless covered in snow, solar panels are actually more efficient in cold conditions.  Like most electronics, solar panels function better at colder temperatures than under intense heat.  Most arrays hit their highest power generation of the year on cold clear winter days at noon.   

Should I try to clear the snow off my solar panels? Snow will usually melt quickly off your panels. There is the occasional blizzard, however, that leaves snow lingering on rooftops for an extended period of time. Overall, yearly production loss from snow cover is very small. At Third Sun, we do not recommend trying to clear the solar panels. Getting onto a roof in inclement weather is dangerous and using any type of tool on the panels themselves can damage the panels. Snow falling off of the panels can be a nuisance, and if the lower edge of a roof mounted array is close to the edge of the roof, we will recommend “Snow Guards” over doorways or areas with pedestrian activity. 

Remember that, living in the Midwest, the worst of the winter months and the short days only last for about three months. Time with reduced solar output is limited. In the sunny summer months, your system can generate more solar energy than you use, which will be reflected in a surplus energy credit. At the end of the year, our customers are happy with their overall annual production.   

Now that you know this, consider…  

2019 is the final year to get the full 30% federal tax credit before it drops. Ohio homeowners are realizing the savings and the return on investment will increase when you go solar before the end of 2019.   

If you would like a quote for your home, business, or non-profit please sign up for a free solar estimate or call 877-OWN-SOLAR today.   

It’s Easy to Claim Your Federal Solar Tax Credit

Understanding your federal tax forms seems like a lost cause to many people. And turning to a tax professional may be your cup of tea. But in a post by EnergySage, they’ve broken down every form needed to claim the federal solar tax credit, most commonly referred to as the ITC (Investment Tax Credit).

Some things mentioned to keep in mind:

  • Solar array owners (not leasers) are eligible to claim the ITC on any property they live in at least part of the year. (Primary or not)
  • The ITC is a refundable tax credit, which means that if your federal tax liability is less than the total solar savings, you can carry over the remainder to the following year because you can’t get more back than you owe in any one year.

You’ll just need one additional form to complete in order to claim your tax credit: IRS Form 5695. Once you’ve completed Form 5695 in the manner they outlined, you’ll take the final result (line 15) and include it in your IRS Form 1040, line 53.

Read original article at EnergySage.com…

From Paris to Your Home

COP21 to Home
This week, 190 leaders from around the world are gathered in Paris for the 2015 Climate Change Conference (COP21). Governments from the largest nations to the smallest, from the most wealthy to the poorest, are putting forth plans to slow global warming. With such distant dignitaries working on the problem, where does that leave you and me?

It may feel like all of us back at home are just in the audience of the climate talks. We are outside looking in, following the scenarios, the plans and the pledges. But we don’t have to just be1 spectators. We can actively participate by making necessary changes in our own back yard.

Several key actions have been identified as needed to limit the most severe effects of global warming. These are actions that nations, states and cities will be making pledges and plans around. They are also actions that each one of us can address individually, in our own homes, and in our own back yards.

  • We can increase the efficiency of buildings. Think about your own home: where can you make efficiency improvements? US News and World Report offers 10 Energy Efficient Home Improvements you can make like sealing air leaks, adding insulation to your attic, and installing a programmable thermostat. The bonus you get with these improvements is that you not only make your home more efficient, you’ll use less electricity and gas, and save you money. Over the long term, you will save more money than it costs to implement these improvements. And you’ll reduce your use of fossil fuels.
  • We can increase electricity generation using clean power like solar and wind. Over the last 15 years installing solar on homes around the Midwest, we’ve experienced the price of solar dropping 80%, which has been making solar cheaper for many homeowners than their existing electric provider. You can save money from day one and do your part to contribute to the slowing of global warming by switching to renewable energy. We are seeing more homeowners than ever taking this bold and smart step to reduce the amount of fossil fuel pollution entering the atmosphere.
  • We can educate. Each one of us can share news and ideas for slowing global warming. When we take action at home to reduce fossil fuel usage, we can let our friends and neighbors know how they can do the same. We are in this together and the only way we will get out of it and make an impact is together.

The adage “Think Globally, Act Locally” still applies to the world’s climate crisis. Leaders on the global stage in Paris are making commitments and taking action to help alleviate this crisis, and each one of us can do the same on our own local stages too.

 

Opt OUT of Black Friday and Opt IN to Green Friday

OptOutside

Around the office, we’re getting a little worn out from all the hype and consumerism of Black Friday. So this year we’ve decided to opt out of Black Friday and Opt IN to Green Friday. You might be wondering what we mean by that. Well, being a solar company, we tend to be green-minded. We spend a lot of time thinking up ways to do good for our communities and environment, and the more we thought about Black Friday, the more it didn’t sit well with us. So we’re reimaging what it could be.

Green Friday for the team at Third Sun is going to be spent reconnecting, recharging, and relaxing this year, and here’s how we plan to do it:

  • Relaxing with our loved ones both near and far
  • Playing flag football
  • Hiking at local parks
  • Mountain Biking
  • Skateboarding
  • Decorating for Christmas
  • Renovating our homes

A couple more ideas for opting into Green Friday would be to volunteer your time with a nonprofit, clear out your closets and donate items to charity, or sleep in and enjoy a cup of coffee while reading the newspaper. Opt IN to Green Friday with us and share your plans to do it in the comments below, Twitter, or Facebook.