District Rebate Plus Federal Tax Credit
The federal tax credit from the stimulus bill combined with payments from Solar renewable energy credits, will contribute over one half of your investment in solar energy.
- In January 2005, the District of Columbia (D.C.) Council enacted a Renewable Portfolio Standard (RPS) with a solar carve-out that applies to all retail electricity sales in the District. When electricity suppliers (Pepco) do not meet their requirements of this standard, they must pay a Solar Alternative Compliance Payment (SACP). This rate is set at $500 per MWh. When you install solar on your property, you earn credits that the energy suppliers can purchase to meet their SACP. These credits have value (less than $500 each). For every KW of power your system is rated, you earn 1 credit. For example, a 3KW system will earn you 3KW per year. You can sell these credits each year or you can sell them for an “upfront amount”. These values will fluctuate based on supply and demand.
- The Residential Renewable Energy Tax Credit earns homeowners/building owners a credit (not a deduction) equal to 30% of the full installed solar electric system cost. Combined with the REIP rebate, DC homeowners can recoup more than half the cost of a new solar electric system. These two incentives comprise one of the most generous solar incentive packages in the nation.
How the Incentives Are Structured
- Here is how the incentive is structured for electricity generated by solar panels: A solar, or photovoltaic (PV), panel or module is rated by the amount of direct-current electricity it can generate. Since most roofs are flat and cannot hold the weight of a crystalline panel (see flat roof analysis), many integrated installations can be installed through the use of thin-film laminates, unless you have your roof structure upgraded to hold the additional weight of the panels. Another option would be to install solar panels on racking that rests on the parapet walls. At this point in time, there are no rebates from the DC government.
- Under D.C. law, a solar renewable energy credit (SREC), is equivalent to one megawatt-hour (MWh) of electricity derived from an eligible solar resource. Electricity suppliers (Pepco) must purchase SRECs in order to meet their compliance obligations under the law, or pay a Solar Alternative Compliance Payment (SACP) for any shortfalls in SREC purchases. The SACP operates as a ceiling on the price that a supplier would pay for SRECs used for compliance with the D.C. RPS. The SACP is set at a flat rate of $500 per MWh. The value of an SREC varies based on market conditions, but as of September 2014 sales of D.C.-sourced SRECs tracked on Flett Exchange averaged $471 per MWh. Individual trades have taken place at both lower and higher prices and it should be noted that these prices reflect SRECs generated in D.C. which may have been sold into other state SREC markets.
- There is a Federal Residential Renewable Energy Tax Credit that is equal to 30% of the total cost of the system. Below is the estimated total incentive amount for three example systems:
|System Size||Approx. Costs for Illustrative Purposes Only*||Renewable energy credit (SREC)||Residential Renewable Energy Tax Credit||Combined Incentive $ /
% Paid Back
|3.35 kilowatts||$16,750||$5,192||$5,025||$10,217 / 61%|
|5.00 kilowatts||$25,000||$7,750||$7,500||$15,250 / 61%|
|7.50 kilowatts||$37,500||$11,625||$11,250||$22,875 / 61%|
* Certain installations may require additional charges due to roof conditions. Structural work not included.
Steps for Purchasing Your Solar Electric System and Securing Your Renewable Energy Incentive Program Rebate
- Receive a free solar evaluation from Maggio Roofing.
- Visit www.greenenergy.dc.gov for the latest program information.
- Download this DCRA document for the complete process.