Federal Investment Tax Credit for Solar and Batteries

… and new battery installations! 

 

Last week I (Intern Liz) went over Net Energy Metering. If you haven’t read that, here’s the link. 

Article layout: what my understanding was, what I researched, then what I learned.

My understanding

• The current tax credit is 26% for if you install solar panels and batteries.
• This means that when you get solar, you will get 26% off of your purchase.
• So, instead of getting charged 26% in taxes, you gain that 26% back. Which, if I am correct on this, is a crazy amount of money!
  • For example, if you put 20,000$ into solar, you’ll receive 5,200$! So you basically only pay 14,800$.

*Note this was my understanding before research, and I was wrong in some aspects. Below is the correct information on it.

My Research

I got my information from 5 different articles and 3 videos to make sure I got a good grasp on the topic. The federal tax credit is also known at ITC.

• Here’s what a tax credit is; it’s a dollar amount that decreases the income taxes you owe during tax season.
  • For the solar tax credit, it is claimed on federal taxes and there is no maximum limit. If your tax credit exceeds the amount you owe, it will carry over to the next tax year.
    • This solar tax credit rolls over to the next year if the complete amount is not used
  • You will need to fill out the IRS form 5695 for it.
• In 2019, it was a 30% tax credit, in 2020 it went down to 26%, and in 2022 it will only be 22%.
  • In 2024 it will expire unless congress renews it.
• This tax credit is on a federal level, not just a state level.
• You have to own the system to qualify, so you do not get the tax credit for a lease but the leasing company does.
• Everything you got charged for (labor, the panels, batteries, etc) count towards the tax credit. 
• Batteries that are installed as a separate or future install as the solar also receive the tax credit as long as the battery is charged by the solar. 
• If you already got a rebate from a utility company, they just subtract it out of the total cost. But, if your rebate was from the government, it is not subtracted out.

*One great thing to note: Since you are not having to pay X amount of taxes because of the tax rebate, you get that much more back in your returns! 

What I Learned

I had a lot to learn to better my understanding of the solar and battery Investment Tax Credit (ITC), which is partly why SEG is assigning me to write these journal posts. Not only to learn the basics of solar but also re-teach the reader!

• Now I know what the word tax credit means, which plays a big role in understanding the ITC aka solar tax credit.
• My new understanding is that you will get off X amount of federal taxes you owe, based off of the total amount you pay for getting a solar system installed.
• I also learned that the tax credit is decreasing every year!
  • That’s so sad, I want to see solar to be encouraged and losing these benefits lowers the incentive for people to go solar.

This also shows me that it is a pretty urgent matter to jump on and go solar. Now’s the time! I wish I was a homeowner already so I could reap these benefits, but hopefully they’ll have new and improved technology or continued benefits when I eventually do own a home!

I also hope that you guys got to learn something new from this journal. I will be putting out a few more journals in this little series to learn more on my end, and spread that information!

Check back in next week to see that topic! Thanks for reading!

Solar Net Energy Metering Explained (NEM)

Solar 101 Learning Series with Intern Liz

Hello! For the next few weeks I will be going over some of the solar topics that I’ve learned as an intern.

This week, I will go over Net Energy Metering (NEM), what it is, how it affects you, and what’s the current situation on it. 

First, I will explain my take on it, then I’ll go over what I found while doing research.

My Understanding

NEM is a way to pay back solar owners for the energy that they do not use. Here’s how this works:

• Solar is connected to the local energy grid.
• The energy that the solar on a house produces goes into the grid.
• The solar energy produced will either cover what the house uses and they’ll have a surplus, or they’ll use more than they produced and have to use energy from the utility company.
• If they produce a surplus, the utility company can sell what they gain.
• They then will pay the solar owner for their energy that was provided, because of NEM. 

The Research

For this information, I used multiple sources; 3 articles and 4 videos. The newest version of the NEM program is called, “NEM 2.0”. 

• PG&E, SCE, and SDG&E customers are eligible. 
  • After 5% of the utility customers have gone solar, the utility company switched from NEM 1.0 to NEM 2.0
  • California Municipal Utilities like SMUD follow their own NEM rules. 
• It covers all forms of clean energy, along with fuel cells. (see more details in the CPUC’s article) 
• This allows the producers of the energy to get paid (at retail rate in bill credits) for their surplus produced, if the system is under 1 MW.
  • These retail rates go off of the “peak” and “off-peak” system. 
  • You’re charged on a yearly basis, rather than a monthly bases.
• There are some set charges involved; a non-bypassable charge that’s fixed for each kWh, and a one-time inter-connection fee.
• The surplus is added up and tacked onto your bill as a credit, rather than a charge. 
  • You use these credits when you are taking energy from the utility company.
• If you start NEM 2.0 now, you won’t lose your benefits for 20 years because of grandfathering. 
  • The next NEM bill (NEM 3.0) will most likely decrease the benefits for homeowners.
• There are 4 other programs that get more specialized for certain situations. 

            How NEM Works

• • • Your solar energy goes back to the utility company
    • They sell it at retail rates
    • What they sell gets put on your bill as a credit
    • After one year the difference is calculated, you either pay for what you ended up taking or not paying.

Heard of AB 1139? It tried to take away NEM! Utility companies were trying to gain EVEN MORE profit by not paying back the owners putting energy into the grid. Fortunately, it was not successful. 

Harry from SEG showing our support at the Capitol!

Overall, I feel that I had a pretty good understanding of NEM based off of what Harry from SEG taught me; NEM pays you back for your clean energy that you provide for other homes to use.

What I Learned

•  It’s not just solar that qualifies, which is awesome!
• There are other charges involved
• There’s other specialized programs within this one.
• The solar owner gets paid through the energy bill, not other forms such as checks.

I hope that I got to teach you guys something new! If you have further comments feel free to let us know on our Facebook page, this article will be posted on there :)

I’d love to hear if there’s any information I missed, or what you guys think about AB 1139. 

Intern Liz Journal #2: Are We an Invasive Species?

Hello! Intern Liz is back for journal #2 :D! In this article, I figured I’d tap into my life and ideas a little more. If you missed #1, here’s a link: Meet Intern Liz.

All my life I’ve been fascinated by the sciences, I love observing the world around us, and then questioning it. This week, I want to show you why I think it’s important to question things.

In my apartment complex we have lots of trees (woohoo), but I noticed something off about one of our pine tree groups. Some trees had  a lot of brown on their tops. Some people might think, “Oh ok, the trees are just dying, it’s natural.” But after everything I have been learning in Sierra College, I could not be satisfied with a statement so simple. I asked myself, “WHY are these pine trees dying?”.

With my interest peaked, I stared and examined them, until I noticed that the brown wasn’t just on one of the trees, it looked like it was spreading from tree to tree. One tree had more brown than the others, and the brown on the tree next to it had it in the spot where they touched. I considered why it could look like this; was it just a coincidence, or was something causing this? I finally concluded that maybe these trees have a disease that they’re spreading, a disease that is completely changing these trees’ lives.

After doing some research, I found that this is caused by the Western Pine Beetle. Even though it is not a disease, it is still something that often gets overlooked when we see a dying tree. The beetle was greatly affects these trees.

 

 *My image on top, on bottom an image from UCANR

This concept reminded me of what I’m noticing about our planet as a whole.

I think we are acting like an invasive species to our Earth, but it’s not getting noticed.

Our planet is like those pine trees; dying because of one single species. I see that, like the Western Pine Beetle, we are taking out forests patch by patch. I think we are invading into places where we don’t belong.  

I feel like we continue to take and take and take, but not give back enough. Don’t get me wrong, there ARE many who do give back, but I don’t think we’re matching what we take. I don’t think there’s enough of us giving back.

I found that what I like to do is ask why something is the way it is, then ask what can I do to try and help. What small change can I make? One of my favorite statements that I’ve heard is, “If you think you are too small to make a difference, try sleeping with a mosquito”. For me, I view my journal posts as one of the things I can do to can make a difference, help spark and idea in someone else to look at what are doing a little deeper. :)

I understand that my journals will not be seen by the entire world, nor even the entire state, or even an entire county! But I am happy knowing that even one person can read this and possibly gain insight, fresh ideas and thoughts.

I hope my journals can be like that first light bulb in the picture above; ready to spread new light. This is one of my small ways that I think can help our planet, one of my pieces to the overall puzzle.

What are some pieces you can add to the puzzle?

Here’s what I encourage my friends to do:

• Support and promote clean energy solutions like solar
• Encourage the purchase of energy efficient appliances
• Walk to places that are under a 5 minute drive
• Reuse/ repurpose items
• Save water by turning it off as you clean dishes, scrub hands, or brush teeth
• Self sustain by gardening or raising your own livestock (like chickens)
• Composting
• Most of all, to take a few minutes out of your day to learn ways and to give back

In conclusion, thank you for reading my insights on a question that comes up often in my thoughts. Are we, as humans an invasive species?  Are we like the pine beetle taking until there is none left?

While I ponder this question I will try and put my piece of the puzzle into place by spreading views and ideas, from my point of view. 

Again I ask, what are some pieces you can add to the puzzle?

Follow us on our Socials and subscribe to our newsletter to read my next journal entry where I will share some more thoughts on what I have been thinking about and learning at my time as a student intern at SEG. 

Meet Intern Liz

Hello everyone! My name is Elizabeth Young, and I am the new intern for Sustainable Energy Group. I will be known online as Intern Liz.

There are a few reasons why I wanted to join SEG, but after meeting some employees and learning what was needed of me, I was even more excited! I have only been here since the end of March, but I already have so much to say! 

The plan is for me to have my own updates each month in the newsletter. The perfect place to start would be why and how I’m here.

I am on my last semester at Sierra College for my Environmental Studies and Sustainability degree, and my Natural Sciences Degree. This summer I will also receive a 3rd degree in Biological Sciences. Since I am so close, I figured I would start searching for opportunities in the field of sustainability.

I eventually found myself on the phone with Harry O’Rourke, the one who is training me. I learned what my roles would be; managing social media, creating/editing newsletters, and creating my own journal and posts! I would be given instructions and guidelines, and also have room for adding my own personal touch and story.  I would be able to actually spark change just by sharing my ideas about sustainability!

Not only will I be helping  SEG in these areas, I am also their link into the Roseville to Auburn area! With more and more installs happening in that area from SEG it seemed like a perfect fit! I hope you will enjoy everything I end up doing! I know I’m definitely excited for what is ahead of me.