What is the 30% Federal Tax Credit?
When you purchase a solar electric system, you will receive a 30% federal tax credit on the entire purchase price of your system. This includes the cost of all your equipment and the cost of installation of a residential or commercial solar system.
It is worth more than a tax deduction
because it can be applied as a dollar for dollar credit against income taxes
that are owed by the taxpayer. For example, if you paid $20,000 for an installed solar system, then your tax credit would be worth approximately $6,000. Thus, your actual net cost
of your new solar system is $14,000. Uncle Sam wants to pay you 30%
of what it costs for you to go solar and for you to save money!
If you do not owe sufficient income tax for the year that your system was installed, then the remainder of the tax credit can be carried over
to the next year. Your tax preparer can help you plan your tax liability so that you can take advantage of the tax credit as much as possible. And remember, when you sign a lease or PPA contract, you do not get your 30% tax credit
. You will forfeit the tax credit to the lease or PPA Company. They get
your 30% tax credit in their pocket
Does 35th Street Solar Offer Leases and PPA Agreements?
Short Answer – "NO!"
Longer answer – "NO! Because we are in the business of saving people money, not charging them twice as much as they should have paid."
The leasing and PPA companies make it sound so simple. "Sign here and we'll reduce your electric bill." It may be simple but it's not at all what it seems.
Unfortunately, a solar lease is one of the most expensive ways
to finance the rental of a solar system. Leasing a solar system will cost you two times what it costs to purchase our 35th Street Ultra High Performance Systems for your home or business
. Plus, our systems are generations ahead in quality and performance.
If you do a solar lease or PPA you will not receive your 30% federal tax credit
– the Leasing or PPA Company gets it. On a $20,000 system you will end up giving them your $6,000 Federal Tax Credit. You'll also have to forfeit any chance at receiving any cash rebates
that may be offered by the state, your city, or any rebates offered by your electric company. They get all your tax credits and rebates, and you get absolutely nothing!
The leasing companies will tell you that they will apply your tax credit and any cash rebates you are entitled to - to the system price so that they will lower the acquisition cost. But, and this is a big but, the leasing company's pricing is so over inflated
that your tax credit and any rebates, as large as they are, will hardly make a dent in their price. The leasing companies will also tell you that your leased system will include free maintenance, repairs and insurance. But again, their pricing is so much higher than what you can purchase a system for that it is actually YOU who will be paying for the maintenance, repairs and insurance
due to the much higher pricing that you'll pay for your rented system.
The bottom line is — you will be paying twice as much to rent your system as you would have paid to own it. Plus there’s more good news if you decide to lease your solar system …
Good luck ever selling your home with a solar lease attached to it!
What homebuyer will want to assume your high lease payments on a used, poorer performing system the leasing company put up, when they can buy and own a new state of the art higher performance system for $3.75 a watt or lower, installed, before incentives? Please do your own research, and search the Internet, and you'll find many articles concerning homeowners who are having difficulty selling
because they have solar leases attached to their homes.
Instead of an expensive solar lease or PPA, consumers are now getting $0 down solar loans. These offer tax deductible interest and allow you to keep the 30% federal tax credit and any other incentives / rebates
. And, you now own your solar system for a much greater return on investment than any lease or PPA. With a buy you add value to your home. With a lease you add a liability to it.
This is how we see it from all our research. We encourage you to get as much information as you can if you are even remotely considering a lease and come to your own conclusions. In our minds, leasing a solar system is one of the worst financial decisions anyone can make. Run the numbers comparing leasing vs. buying and we believe the right decision is hugely obvious.
The Leasing Company Said That They Will Apply The Incentives To Lower The Cost Of The Lease. Is This True?
This may or may not be true. But remember, the leasing/PPA companies charge such a high price for their systems that your 30% federal tax credit, and any other incentive, will have little impact on a leased system's cost when compared to purchasing your system outright.
Does 35th Street’s Price Per Watt Include Everything Needed For A Complete Solar Installation?
NO – It does NOT! And this is a very good thing...
Our price per watt does not include any city permitting or engineering wet stamp fees
. You are responsible for paying the exact actual cost of any permitting or stamping fees your city charges.
Your solar project needs to be approved and permitted by your city. Our installer will have engineering plans drawn up for your home which includes all the plans and equipment being used in your installation. This will then be submitted to your city for approval. Some cities charge a fee for a solar permit and some do not
When we first got the quotes and bids for our solar systems, all the solar companies we interviewed were going to charge us a flat fee
that would cover the permitting and stamping fees from our cities. This “fee”
from them ranged from $1,000 to $3,000! This sounded “high” to us and so we did our own research to see how much these fees actually were.
Well, would you believe that the cities of Huntington Beach and Newport Beach do not charge any fees for a solar permit?! But they both do charge an engineering wet stamp fee of around $350. We learned that these flat fees solar companies charge are just another way for them to make more money off unsuspecting consumers. The fee they charge for permitting is just pure profit central. We are appalled by this practice. This is yet another reason we decided to do it ourselves and save lots of money just by not paying their “fee” for the city fees.
So … we do not charge a “fee” for city permitting and stamping. Whatever the actual costs your city charges – you are responsible for. Each city has a different rate schedule and we feel this is the most fair and honest way to cover the costs charged by the cities for your solar project. In fact, we think it’s the only way to do business.
How Can I Have Free Electricity?
By Purchasing Your Solar System it Can Pay Itself Off In As Little As 4 To 5 Years. You Will Then Have Decades Worth Of Free Electricity*.
With A Leased/PPA System, Your Electricity Will Never Be Free!
Pricing for a 35 th Street Ultra High Performance Solar System is so low that after applying your 30% Federal Tax Credit, your purchased solar system will typically recover your investment (pay itself off) in only 4 to 5 years. Then, the electricity that your system produces is free* for the remaining 20 to 25 year average life expectancy of your solar system.
With a solar Lease or PPA (Power Purchase Agreement) all you're doing is trading your current electric bill payment for a slightly reduced (10% to 20% reduction) Lease or PPA payment. Your electricity will never be free with a lease or PPA and you will continue to have electricity payments for the entire 20 years of the lease/PPA term.
In fact most $0 down solar leases and PPAs include an annual payment escalator (payment increase) that will raise your monthly payment amount by up to 2.9% per year every year for 20 years.
And After Making 20 Years Worth Of Payments to Your Lease/PPA Company, The System Will Still Belong To Them And Will Be Removed or You Have to Buy It From Them! You Never Stop Paying Them.