By 2050, Wisconsin has pledged to be completely carbon-free. One way the state aims to reach this goal is by making use of solar power. That's why the state continues to offer solar incentives, like tax credits.
These incentives reduce the upfront costs and long-term expenses associated with solar installations. Learn more about how you can take advantage of Wisconsin solar incentives to contribute to a sustainable future.
Understand the Focus on Net Metering
Net metering is a key incentive offered in Wisconsin. It's designed to promote the adoption of solar energy systems.
This program allows solar system owners to receive credits for any excess electricity they generate. This is then sent back to the grid.
By understanding how net metering works, you can offset your energy costs. You could also potentially earn credits to use during times when your solar system is not producing enough electricity.
How Net Metering Works
When your solar system generates more electricity than you currently need, the excess energy is sent back to the grid. That's what net metering is. In return, you receive credits on your electricity bill for this surplus electricity.
These credits could offset future electricity consumption when your solar system is not producing that much energy. For example, during nighttime or cloudy days.
Time-of-Use (TOU) Rates
You may also find utilities that offer time-of-use rates. This is where the cost of electricity changes based on what time of day it is.
If your utility has TOU rates, it may be beneficial to schedule high-energy consumption activities during periods when your solar system is generating the most electricity. This way, you can maximize the value of the credits earned during peak production hours.
Stay informed about any changes or updates to net metering regulations in Wisconsin. Net metering provides significant benefits for solar system owners. But policies and incentives do change.
Staying engaged with local solar advocacy groups will help you stay up to date. Relevant government agencies also help you stay updated on any developments that affect net metering.
Explore Focus on Energy
Wisconsin's Focus on Energy program provides financial incentives to encourage energy efficiency. The program also offers resources on renewable energy adoption.
Explore the various solar programs and incentives available through Focus on Energy. For example, the Renewable Energy Competitive Incentive Program (RECIP). Some programs offer grants, rebates, and other financial incentives to support solar installations.
Investigate Federal Tax Credits
Exploring federal solar tax credits is a crucial step in maximizing the financial benefits of your solar installation. The Federal Investment Tax Credit (ITC) offers a significant opportunity to claim a percentage of the cost of your solar system as a tax credit. This is a great Wisconsin solar incentive.
Understanding the Investment Tax Credit (ITC)
The Investment Tax Credit is a federal incentive designed to encourage the adoption of renewable energy systems. This includes solar.
It allows eligible solar system owners to claim a percentage of the total installation cost as a tax credit. The ITC directly reduces the amount of federal income tax owed, dollar-for-dollar, based on the credit percentage. So you save money in the long run.
Current ITC Percentage and Expiration
As of 2022, the ITC offers a 30% credit, which can have a significant impact on the overall cost of your solar project. However, it's crucial to stay informed about any future changes to the credit.
The ITC is scheduled to decrease in subsequent years. Of course, it's possible these reductions will be canceled if the program continues to prove to be successful. Currently, there are plans for a step-down to 26% in 2033 and a further reduction to 22% for commercial installations in 2034.
Eligibility and Qualifying Criteria
With all the benefits of the ITC, you might be wondering if you can claim it. However, this all depends on the solar system you're using, which must meet certain criteria to qualify.
The tax credit is available to solar system owners, both residential and commercial. Leased systems do not qualify for the ITC, as the tax credit is only applicable to the owner of the system.
Placed in Service
The solar system must be "placed in service" by a specific deadline to be eligible for the credit. Currently, the IRS considers a solar system placed in service if it is operational and capable of producing electricity.
The tax credit can only be applied against your federal income tax liability. If your tax liability is lower than the credit amount, the excess credit may be carried forward to future tax years.
Consult with a Tax Professional
Understanding the intricacies of the federal tax code can be complex. Consult with a tax professional or advisor who specializes in renewable energy incentives.
They can provide personalized guidance based on your specific financial situation and the Wisconsin solar tax credit. You can also get help and advice from them on how to navigate tax credit requirements and the filing process.
Documenting and Claiming the Credit
Proper documentation is essential when claiming the ITC. Keep records of all receipts, invoices, and documents related to your solar installation. You will also need proof of purchase, installation contracts, and equipment warranties.
When filing your federal income tax return, complete IRS Form 5695, Residential Energy Credits. Or complete IRS Form 3468, Investment Credit. The one you complete depends on your residential or commercial installation.
Include the necessary information to claim the ITC. Attach the completed form to your tax return. This will ensure your claim goes through without any hassle.
Consult with Solar Installers and Professionals
When you work with solar installers, you can maximize Wisconsin's solar benefits. They will have the necessary knowledge to get the most out of these benefits as possible.
Experts can also help you navigate any of the more complex processes and paperwork. They'll ensure your system meets all eligibility criteria too. You can consult multiple installers to get a second opinion.
Your Solar Financing Options
Solar installations are more accessible than ever. This is thanks to a range of financing options available to Wisconsin residents.
By exploring these options, you can find a financing solution that suits your needs. These solutions make solar energy affordable and let you contribute to a sustainable future.
Property Assessed Clean Energy (PACE) Financing
Wisconsin offers Property Assessed Clean Energy (PACE) financing. This program allows property owners to finance solar projects through their property taxes. PACE financing provides long-term, low-interest loans for renewable energy upgrades, including solar installations.
The loan is repaid over an extended period. It's typically up to 20 years, through a special assessment of your property tax bill. PACE financing is beneficial as it allows you to spread the cost of your solar system over time.
Solar loans are a popular financing option for homeowners. These loans are specifically designed for solar installations. They offer competitive interest rates and flexible repayment terms.
Many financial institutions, solar installers, and government programs offer solar loans. Shop around and compare loan options to find the most favorable terms and conditions.
With a solar loan, you can own your solar system outright. These loans also allow you to reap the benefits of reduced electricity bills.
For homeowners who don't want to purchase a solar system outright, solar leases are an option. With a solar lease, a third-party solar provider installs and owns the solar system on your property. In return, you agree to lease the system and pay a monthly fee for the electricity it generates.
You may not benefit from financial incentives. But solar leases require little to no upfront costs. This makes solar energy accessible to a broader range of homeowners.
Power Purchase Agreements (PPAs)
Power Purchase Agreements (PPAs) involve a third-party solar provider installing and maintaining the solar system on your property. However, instead of leasing the system, you agree to purchase the electricity it produces. The price is at a predetermined rate per kilowatt-hour.
PPAs offer a fixed electricity rate, providing stability against rising utility costs. PPAs also require little to no upfront costs.
Research Local and State Financing Programs
Wisconsin offers local and state financing programs that make solar installations more affordable. Programs like Focus on Energy's Solar Financing Program are great options. They provide low-interest loans for solar projects.
Some local utility-specific programs offer solar rebates or incentives. These programs can reduce the upfront costs of your solar installation. They also improve the return on investment.
Embrace Energy Efficiency
Before investing in solar energy, focus on energy efficiency measures. These should work to reduce energy consumption. By implementing energy-efficient practices, you can optimize the performance of your solar system.
Focus on insulation, LED lighting, efficient appliances, and smart home technologies. All these measures cut your energy demand.
Stay Up to Date on Wisconsin Solar Incentives
Wisconsin solar incentives present a golden opportunity for people to embrace renewable energy. These incentives make it rewarding for those wishing to build a sustainable future.
Specific tax benefits mean you save money on your energy consumption. You can increase your savings while decreasing your carbon footprint. For any questions about solar power and renewable energy, contact Skyline Solar Power.