Monday, April 25, 2011

Defining the Role of Government Incentives in the Growth of Solar Industry

Degeneration of the environment brought about by fossil fuel emission in electricity plants is an established fact causing world-wide concern. This drove various governments including US to search for alternative sources of power. Solar is prominently considered.

Solar technology is ripe and waiting for consumer adoption. To fast track the use of solar power, the state and federal governments have offered a variety of incentives to encourage homeowners and businesses to put panels on their roofs, and for utilities to buy power from large independent solar producers.

What are these incentives? And how did it affect the solar industry?

Government solar incentives:

Federal incentives:

1. Performance-Based Incentive
Renewable Energy Production Incentive (REPI)

2. Personal Exemption
Residential Energy Conservation Subsidy Exclusion (Personal)

3. Personal Tax Credit
Residential Energy Efficiency Tax Credit
Residential Renewable Energy Tax Credit

4. The Emergency Energy Policy Act of 2005 offers a tax credit of 30% for photovoltaic system (solar home energy) and water heater with a tax credit ceiling of $ 2,000. This Act expired on December 31, 2007.

5. The Emergency Economic Stabilization Act of 2008 extended the expiration of Emergency Energy Policy Act of 2005 to December 31, 2016. This Act offered the same tax credit and increased the tax credit ceiling by removing the $ 2,000 limit.

6. The American Recovery and Reinvestment Act of 2009, (ARRA), commonly referred to as the Stimulus or The Recovery Act, is an economic stimulus package enacted by the 111th United States Congress in February 2009. It provided $94.8 billion for clean energy. The program was established under section 1603 and provided cash grants covering 10% or 30% of the total cost of developing new renewable energy facilities.

ARRA also funded research projects to develop future renewable energy technologies which could be cost competitive to sources of electricity producing air pollutants.

According to the Solar Energy Industries Association (SEIA), ARRA has supported more than 1,100 solar projects in 42 states, creating enough new solar capacity to power 200,000 homes. ARRA has resulted in nearly 40 percent growth in the solar power market in 2009 and nearly double in 2010.

State incentives

State tax rebate.The U.S. government offers many incentives in different states to encourage solar power adoption in order to compete with conventional electricity source where the price is lower than solar generated energy.

Database of State Incentives for Renewables and Efficiency (DSIRE) is a comprehensive source of information on state, local, utility and federal incentives and policies that promote renewable energy and energy efficiency. Established in 1995 and funded by the U.S. Department of Energy, DSIRE is an ongoing project of the N.C. Solar Center and the Interstate Renewable Energy Council.

DSIRE provides a comprehensive list of the different states and the solar tax rebate they offer prospective solar users. Please visit them at:

The results from the different sectors showed that government investment has played a significantly role in the growth of solar industry in America.

We invite you to visit our Informative Solar Article page for more practical tips, simplified application guide and established solar benefits.

Author’s Box
Jacinto Demonteverde, Jr., the owner, is a strong advocate of solar power adoption. He writes practical articles to keep established and prospective solar users well informed. Visit him at:


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