Solar Water Heating

Federal Solar Incentive Overview and Section 1603 Renewable Energy Grants

The two main commercial solar incentive programs available at the federal level are:

  • Section 1603 Renewable Energy Grants. Project started in 2011 receive 30 percent payment from the Treasury no more than 60 days following solar energy system activation. After 2011,
  • Accelerated depreciation + bonus depreciation (2010-2012). A 100% bonus depreciation is available for 2011; in 2012, the bonus portion of the accelerated depreciation schedule goes to 50%.

Beyond this, a number of state governments and municipalities offer tax abatements, solar rebates and other incentives that can significantly increase the ROI of a given commercial solar energy project.

30% Federal Investment Tax Credit (ITC)

Under U.S. Code Title 26 (Section 48(a)(3)), the federal government extends a corporate tax credit to businesses that invest in renewable power. The types of eligible solar technologies include: solar water heat systems, solar space heat, solar thermal electric, solar thermal process heat and photovoltaics (PV). The credit -- or grant (see above) -- is fixed at 30 percent. Note that the credit for businesses is not constrained by a dollar-value cap. So regardless of whether you install a $100,000 system or a $1 million system, your company is permitted to take a 30 percent credit. In October 2008 Congress voted to extend the ITC for eight years, through 2016.

State Incentivers Vary Please check our links page for the DSIRE weblink

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Potential Uses:
Domestic Hot Water Heating -Typically for showers, laundry, dishwashers, sinks.
Radiant Heating - space heating for living area or storage area
Pool Heating - for indoor pools or outdoor pools to extend the season.
Ice Melting - Heating driveways and walkways


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