Solar Sales Call, what they tell you and what they don’t about costs and tax credits.

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>If you actually want to realize that tax credit into dollars-in-your-pocket, you need to change your federal tax withholdings so that at the end of the year you will owe the equivalent of the tax credit (26% the cost of the system). Then you save that extra money not withheld on your paycheck, owe that amount on your taxes, let the credit reduce that owed amount to $0, and then you have the tax credit value in your pocket. In this case, you would then turn that money over to the solar company in a lump sum. This part is incorrect. Refundable or nonrefundable has nothing to do with your withholdings. A refundable tax credit means your tax liability can be negative (i.e. you pay a negative federal tax rate, as in the government gives you money). Nonrefundable means it just takes your tax liability to zero (and gets carried forward in the case of the solar energy credit). You’re mixing up box 24 on the 1040 with Box 37. > Not sure if that was super helpful to anyone, I found it helpful. It makes me realize I know about a lot of things but cannot for the life of me figure out how much solar *should* cost me.

Werewolfdad

Solar can be a fantastic deal, it all depends on what the incentives are in your state, and whether or not *you* own your panels. Here in MA, it’s typically about a 5-6 year payback on a system, because you get: * Federal / state tax incentives (based on system cost) * SREC/SMART payments (based solely on your production) * Net metering (your bill offset by your production) But it only makes sense if you own your panels, as those companies that offer discounted rates typically take the incentives for themselves (and leave you with a lease that you have to pass on if you sell the place). Ask around and look for a reputable installer that doesn’t do the slimy leasing option. There are solar loan programs that can help. Or you can just get a HELOC and pay that off with the electric savings + other payments from your system. I’ve had my panels for about 3.5 years now. I haven’t paid an electric bill since I got them, and I’m over halfway to the breakeven point. It got even better when I installed a heat pump, letting me use my energy surplus energy to heat my house.

ninja_truck

I’m in Maryland and purchased a 10kw system in 2014 for around 36k. I kept all tax credits and SRECs. I financed the system through a credit union solar loan that had 2 components, 18th month interest free that matched the tax credit and 7 year low interest loan for the rest. I paid the system off in a little over 4 years and figured I’m in the black as far as solar savings after about 6.5 years. I’m still selling SRECS at around $70 each.

hnw555

>If you actually want to realize that tax credit into dollars-in-your-pocket, you need to change your federal tax withholdings so that at the end of the year you will owe the equivalent of the tax credit (26% the cost of the system). Then you save that extra money not withheld on your paycheck, owe that amount on your taxes, let the credit reduce that owed amount to $0, and then you have the tax credit value in your pocket. In this case, you would then turn that money over to the solar company in a lump sum. Just a note that this is based on your total tax liability, not your withholdings. Otherwise everyone would just over-withhold to take advantage of non-refundable tax credits. You aren’t able to game the system like you describe.

yeah87

This doesn’t really change the scaminess of this guys, but are you assuming constant energy prices when it comes to your breakeven calculation? Going solar your costs would be fixed, but electricity prices could increase significantly in 20 years.

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