Solar Energy Features & Tax Credits

Overview

As energy prices continue to rise, solar and other renewable sources are becoming more affordable options for not only large utility-grade users, but also consumers. States help make the switch even more affordable with tax credits and other benefits.

References

NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require a password.


Green Designation 

Looking for more formal training in renewable energy and green building practices? NAR's Green designation provides real estate professionals with the knowledge and awareness of green building principles applied in residences, commercial properties, developments, and communities so that they can list, market, and manage green properties as well as guide buyer-clients in purchasing green homes and buildings.

For more information, visit the Green Resource Council page. 

The Basics

Solar Explained (U.S. Energy Information Administration, Dec. 19, 2018)

Solar Energy Basics (National Renewal Energy Laboratory)

Solar Energy Technologies Office (U.S. Department of Energy)

Adding Solar Energy

A Solar-Powered Home: Will It Pay Off? (Investopedia, Oct. 12, 2018) — Learn the financial aspects of installing solar power, and if it will be a good investment for your home.

Google Project Sunroof (Google) – A calculator to estimate savings from residential solar panels.

Evergreen Solar (National Council for Solar Growth) — Nonprofit group with a mission to educate homeowners and businesses about the economic and environmental benefits of PV solar.

Planning a Home Solar Electric System (Energy.gov) — This article sets out the detailed planning steps for using solar power for your home.

Tax Credits

Please note: While accurate at time of publication, tax credit information can change. Please check with Federal, State & Local authorities for the most up-to-date information.

Solar Tax Credit – Everything You Need to Know About the Federal ITC for 2019 (Energy Sage, Mar. 6, 2019) — As long as you own your solar energy system, you are eligible for the solar tax credit. Even if you don’t have enough tax liability to claim the entire credit in one year, you can “roll over” the remaining credits into future years for as long as the tax credit is in effect. However, remember that if you sign a lease or PPA with a solar installer, you are not the owner of the system, and thus you cannot receive the tax credit.

Your Guide to the Solar Tax Credit in 2019 (MarketWatch, Feb, 27, 2019) — Thanks to the solar tax credit, you start saving money from day one. Even the fees that go into consultations with a professional solar energy expert count as part of the installation costs.

About Form 5695, Residential Energy Credits (Internal Revenue Service, Feb. 27, 2019) — Use this form to figure and take your residential energy credits.

SRECs: Understanding Solar Rrenewable Energy Credits (Energy Sage. Feb. 25, 2019) — Solar Renewable Energy Certificates (SRECs) are a solar incentive that allows homeowners to sell certificates for energy to their utility. A homeowner earns one SREC for every 1000 kilowatt hours (kWhs) produced by their solar panel system. An SREC can be worth as over $300 in certain states.

Green Tax Incentive Compendium (Robinson + Cole, Jan. 1, 2019) — Federal and State Tax Incentives for Renewable Energy and Energy Efficiency.

Residential Renewable Energy Tax Credit (Energy.gov) — A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the "placed in service" date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year.

Energy Tax Credits (HouseLogic) — Systems installed between Jan. 1, 2009, and Dec. 31, 2016, are eligible for a tax credit equal to 30% of the cost. To qualify, the system must supply electricity to a residence and meet local building codes. That means a 5.2 kilowatt system that costs $44,200 would, in theory, earn a federal tax credit of $13,260. (This is a simplified example. Consult a tax adviser.)

Property Value Impact

REALTORS® and Sustainability (National Association of REALTORS®, 2018) — Report shows findings from a February 2018 of NAR members on sustainability issues facing the industry. Discussion points include the prevalence of green data fields in MLSs, value of promoting energy efficiency in listings, interest in sustainability, time on market for homes with green certifications, availability and perceived value of solar panels, and sustainability-related home features of interest to clients.

Tracking the Sun 10: The Installed Price of Residential and Non-Residential Photovoltaic Systems in the United States (Lawrence Berkeley National Laboratory, Sep. 2018) — Now in its eleventh edition, Lawrence Berkeley National Laboratory (LBNL)’s Tracking the Sun report series is dedicated to summarizing installed prices and other trends among grid-connected, distributed solar photovoltaic (PV) systems in the United States. In total, data were collected and cleaned for more than 1.3 million individual PV systems, representing 81% of U.S. residential and non-residential PV systems installed through 2017. The analysis of installed pricing trends is based on a subset of roughly 770,000 systems with available installed price data.

The Role of Incentives in Green Building Valuation (Appraisal Journal, Summer 2017) E — Green building demand continues to increase. Policies, incentives and regulations that affect the demand for green buildings are widespread and emanate from the federal, state, and local levels. This article discusses the influence of rebates, financing, and tax incentives. Rebates and incentives reduce the cost disparity between conventional and green commercial buildings. In valuation, these should be considered to the extent they are commonly available to all market participants at the time of the appraisal. Understanding the market's perspective on incentives as well as the extent of their availability is critical to properly addressing the market value impact of green building incentives.

Valuation of Solar Generation Assets (Solar Energy Industries Association®) — The valuation of solar energy projects is a complex subject and is a source of tension between regulators, developers, and debt and equity investors. This paper is intended to highlight best practices, as well as common pitfalls in valuing solar energy projects including the tangible and intangible assets comprising a fully contracted in-place system (a “solar asset”).

Articles, Reports, & Videos from NAR

Home Buyer and Seller Generational Trends Report (National Association of REALTORS®, 2018) — In particular, see Exhibit 2-13, “Environmentally Friendly Features Considered ‘Very Important.'

Window to the Law: Solar Panel Financing Issues (3m58s, National Association of REALTORS®, 2017) — Learn how to address the issues that solar panel financing can cause so that your transactions proceed smoothly.

Legal Case Summary: Commercial Solar Array Is Not a Nuisance (National Association of REALTORS®, Jun. 28, 2017) — Vermont’s highest court rules that property owners could not claim that commercial solar panel array constituted a nuisance because the solar array did not interfere with the owners’ use of their property, even though the owners claimed that the aesthetics of the solar panels had damaged their property values.

Solar Houses: Opportunity for Real Estate Pros Who Know How to Sell Them (8m6s, National Association of REALTORS®, May 2017) — In this video, NAR and the Solar Energy Industries Association team up to talk about the opportunities for real estate practitioners in helping households buy and sell homes with solar energy systems.

eBooks & Other Resources

eBooks.realtor.org

The Complete Idiot's Guide to Solar Power for your Home (eBook)

The Homeowner's Guide to Renewable Energy (Kindle, eBook)

Install Your Own Solar Panels (Kindle, eBook)

Power from the Sun (Kindle, eBook)

A Solar Buyer's Guide for the Home and Office (Kindle, eBook)

The Solar House: Passive Heating and Cooling (eBook)


Have an idea for a real estate topic? Send us your suggestions.

The inclusion of links on this page does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this page complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.

Advertisement

Transaction Management

Solutions from industry leaders in eSignature, forms software, and transaction management services.