Latest research show that the solar power production increased worldwide by above 50% in 2016 and the biggest contribution is of the United States and China. The use of solar energy in Canada is relatively small, but a large percentage of the country’s electricity comes from other types of renewable energy such as hydro and wind power. In the recent years, there has been a significant growth rate of 13.8% in the use of solar photovoltaic power since 2014 when the installed capacity reached 1843 megawatts. The solar power capacity installed in 2016 in the United States reached more than 76 gigawatts which are 50 gigawatts more than 2015.
To encourage and motivate the citizens of the Canada and United States to continue this expansion, the current Government is providing several incentives and rebates to install solar rooftop systems. The power utilities and some independent organizations are offering different types of incentives to make solar power accessible to every household in the two countries.
Let’s take a look at the current government rebates for the use of solar energy:
Investment Tax Credit
The Federal Government is providing a solar tax credit which is also called Investment Tax Credit (ITC). The businesses and homeowners can now deduct a portion of their solar power investment from their taxes. Businesses and households are eligible for a federal tax credit equal to 30% of the price of the solar power system.
Your state, utility company or municipality can provide you with a cash rebate on the installation of the solar power system. Other organizations which want to promote solar power can also provide solar power installers cash rebate. But they are available for a limited time but they will certainly help reduce your solar power panel cost by at least 10- 20 percent.
In some states, legislation has made it necessary for utilities to produce a certain percentage of solar power. If you are living in any of such states, utilities will purchase your SRECs to record your electricity flowing towards the utility grid. This can help you generate an income of thousands of dollars in one calendar year.
Incentives based on performance
The state administrations and utilities are also offering performance-based incentives which pay households generating solar power a per kilowatt-hour credit. You are just required to install the equipment to qualify for the PBIs. The incentive rates are determined once the equipment is installed.
Tax Exemptions & Subsidized Loans
You may also be eligible for subsidized loans and tax exemptions to finance your solar panel system. These loans are provided by your state, an NGO or utility company but available for just a limited time. And there will be no increase in the tax bill even if your property value increases because of the solar panel systems. Your solar rooftop system may also be exempted from sales taxes states impose.
Financial Rebates in Canada
There are no federal government incentives for residential solar PV systems in Canada. But, if you are a business owner, you can get the Capital Cost Allowance for renewable solar energy. The Canadian Renewable and Conservation Expenses also provide income tax incentives for commercial systems.
Alberta is committed to increasing the use of solar power in its cities. There’s an incentive program for residential and commercial owners to make solar power affordable and to increase the installation of solar panels on 10,000 rooftops in Alberta by 2020.The incentive includes a rebate of $0.75 per watt, which is capped at $500,000 for commercial systems and $10,000 for residential systems. There’s also another program for installation of solar panels on Alberta farms to help the farmers to reduce carbon emission in the environment and conserve non-renewable fossil fuels. An applicant can get a financial incentive of $50,000 or a maximum of 100kW of solar photovoltaics capacity. The Alberta Municipal also provides financial incentives to municipalities for installation of solar PV on their facilities.
The rebates Government is providing will help you reduce the cost of the solar power system about 30 to 50 percent. The cost of solar panels is dropping across Canada and United States of America. If a household in America buys a solar power system in cash or with a loan, it will get the rebates, tax credits, and SRECs. The benefits will go to the buyer but if the household decides to lease the system, in that case, the benefits will go to the third party.