Solar Solutions

Whether the state of California and the country as a whole can move away from fossil fuels depends largely on the growth of renewable energy sources such as solar power, as these are the only solution that provides the electricity we need affordably without the pollution of coal and oil or the dangers of nuclear power.

Although much more progress needs to be made, two recent reports highlight the fact that things are moving in the right direction.

The U.S. Energy Information Administration has published a study showing that renewables, along with nuclear power, will be the fastest growing sources of energy over the next several decades, expanding at a rate of about 2.5 percent per year. In terms of renewable energy (RE) sources, much of the increase will come from wind, hydropower and solar.

In addition, NPD Solarbuzz, a market research company for the solar industry, put out a new paper that states the U.S. has passed the 10 gigawatt (GW) benchmark for solar generating capacity, trailing only Germany, Italy and China. The same report predicted that the industry would grow by 80 percent and reach 17 GW in total solar PV installations by 2014.

“The US has now joined an elite group of maturing solar PV markets that have accumulated more than 10 GW of installed capacity,” said Christopher Sunsong, analyst at NPD Solarbuzz, in a news release. “The United States is only the fourth country to reach the 10 GW milestone of installed PV capacity.”

The California solar energy industry is thriving thanks to tax incentives and shrinking costs of solar panels for homes, but a new report from Environment America Research and Policy Center shows that the state has hardly reached full capacity. The study, entitled “Lighting the Way: What We Can Learn from America’s Top 12 Solar States”, provides information on solar statistics for what the report calls the “Dazzling Dozen”, the 12 states that produce 85 percent of the nation’s solar generated electricity.

California leads the country, having grown astounding 35 percent in 2012 to bring our total amount of installed solar capacity to 2,901 megawatts (MW).

“California’s leadership in promoting renewable energy sources must continue,” State Senator Marty Block (SD-39), said in a news release. “Our shared vision for protecting the environment and developing future technologies is essential to the next generation’s quality of life, our state’s economy, and setting the trend for the nation’s approach to energy security policy.”

California added 1,033 MW of capacity in 2012, 400 more than the next state (Arizona) which is enough power to provide electricity for 750,000 homes.

It’s possible that 2013 will turn into another record breaking year for California. Customers of Southern California Edison can still take advantage of the California Solar Initiative, a rebate program designed to incentivize residents to invest in solar energy, and solar financing is becoming increasingly popular with homeowners who are looking to lower their monthly utility bills. Contact AMECO Solar at (888) 595-9570 or email gosolar@th2.e81.myftpupload.com to find out more about going solar in Los Angeles and Orange Counties.

When most consumers set out to do research about solar panels, they will eventually come across the Residential Renewable Energy Tax Credit also known as the Federal Investment Tax Credit (ITC). This tax credit allows you to claim up to 30% of the price you pay to install solar panels, which discounts the cost going solar significantly. The credit has no limit and will be available through December 31, 2019 and stepped down thereafter.

Admittedly, the solar tax incentive is confusing, and many of our customers have questions about it. While AMECO Solar is not licensed to give tax advice, and we recommend that you consult with a tax professional on all tax matters, we hope that by explaining the basics of the solar tax credit you will have a better understanding of how it will work for you when you are ready to purchase a solar system.

Many people are led to believe that they will receive a check from the federal government after they file their taxes, similar to how typical rebate works when purchasing a product. However, this is not true! The tax incentive is a credit, meaning that when you file your Federal taxes you can claim 30% of the qualified expenditures of your solar system.* If you owe Federal taxes that year, then the credit can be applied and you will either A) owe less, B) owe nothing, C) owe nothing and have a credit left over.

Let’s look at these situations in greater detail. To guide our sample scenarios, we’ll imagine that Joe Solar paid a total of $25,000 for the installation of his solar electric system on his home’s rooftop. This amount qualifies him for a $7,500 Federal tax credit.

In Scenario A (where he would owe less) April arrives, he files his taxes and claims the 30% solar tax credit. It turns out he owes $10,000 in taxes, so the entire $7,500 is applied and he writes check to Uncle Sam for the remaining $2,500 that he owes.

For Scenario B (where he would owe nothing) Joe went to his employer and told him that he would be getting a $7,500 tax credit for the year. The employer adjusted Joe’s withholdings on his pay check so that he took home more money and would owe $7,500 to the IRS in April. In April, Joe applies the $7,500 tax credit to his $7,500 tax bill and owes nothing.

For Scenario C (where he would owe nothing and have a leftover credit), we find out that Joe only owes $1,200 in taxes. His tax credit covers this $1,200 amount that he owes and then the remaining $6,300 tax credit will roll over to any succeeding taxable years through 2016. It may be possible to roll any remaining tax credit past 2016, but it’s not entirely clear as reported by DSIRE.

While most people qualify for the solar tax incentive, there are some that do not qualify. Anyone who does not owe taxes will not be able to benefit from the tax credit. Also, it does not apply for solar installations on rental properties. That said, anyone who installs solar panels on an existing home, new construction or second residence will be able to utilize the solar tax credit.

While you’re in the process of purchasing a solar system, AMECO Solar suggests you consult your accountant or tax professional to figure out the specifics on how to approach the solar tax credit in your specific situation. While we are definitely experts in all things solar, we can’t necessarily claim the same with filing taxes.

If you are interested in a solar installation for your residence or business and would like to see how much you can save with the federal solar tax incentive, contact us at (888) 595-9570 or gosolar@th2.e81.myftpupload.com.

* Typically, “quality expenditures” include the cost of the solar products (panels, inverters, hardware, etc), installation labor and any permitting fees associated with the job. In some cases, you may be able to claim the cost of any re-roofing or electricity work done in conjunction with the solar installation.

Among the many advantages of solar panels are the low maintenance costs associated with the technology. Photovoltaic (PV) panels have no moving parts, and the relatively mild weather in Southern California means they’re almost never subjected to extreme conditions such as high winds, thunderstorms or hail.

For many years, the solar experts at AMECO Solar have recommended that our customers clean their solar panels by merely hosing them off a few times a year. This easy cleaning process combined with the intermittent rain of the area typically cleans the panels enough to keep the solar system running at high efficiency.

However, many solar panel cleaning companies are now selling more thorough cleaning services. They argue that if dust and dirt accumulates on the solar panels, then they will become less efficient in converting sunlight to electricity.

A team of engineers at U.C. San Diego recently called this assumption into question. They studied the efficiency of solar panels for homes that had not been rained on for a period of almost 5 months during a drought, versus those that were cleaned regularly. They found the systems that had not been cleaned or rained on for a 145 day period lost only .05 percent in daily power output. In comparison, those who had washed their solar panels at least once during this same time period ended up saving owners about $20.

“You definitely wouldn’t get your money back after hiring someone to wash your rooftop panels,” Jan Kleissl, a professor of mechanical and aerospace engineering at U.C. San Diego and the principal investigator on the study, said in a news release on the solar research.

The study focused on smaller residential solar systems. Kleissl pointed out that owners of larger commercial solar panels might see more gains from routine cleaning, as these systems typically produced thousands more kilowatt hours more than a residential rooftop array. There was little indication that hiring private contractors to clean panels would be worth the cost, unless you live in an area regularly exposed to soot or petroleum residues that would cause collectors to soil more profusely than those tested in San Diego.

Moving forward, AMECO Solar will stick to our recommendation that our customers in Los Angeles and Orange County allow the rain to clean the dust that might accumulate on their solar panels and, if necessary, merely hose them down every once in a while. If you still think that your solar panels need a more thorough cleaning, please contact us about our per panel price.