GXG ENERGY designs customized Subscriber Agreements and efficient ‘Tax Equity’ structures in order to maximize the benefit of tax credits and rebates. Below are some Federal and State tax incentive schemes that are currently enforced.
FEDERAL Tax Credits
The Investment Tax Credit (ITC), also known as the federal Solar tax credit, allows you to deduct 26% of the cost of installing a Solar energy system from your federal taxes. The ITC applies to both residential and commercial systems, and there is no cap on its value.
The ITC was established thanks to its popularity and success in supporting the America’s transition to a renewable energy economy, with Congress extending its expiration date multiple times. The Investment Tax Credit, which covers the installed cost of Solar and Energy Storage equipment, is available to homeowners, up till the end of year 2021. Hurry up. Here are the specifics.
2020: Owners of new residential and commercial Solar/Storage systems can deduct 26% of the cost of the system.
2021: Owners of new residential and commercial Solar/Storage systems can deduct 22% of the cost of the system.
2022 onward: Owners of new commercial Solar/Storage systems can deduct 10% of the cost of the system (which applies to GXG ENERGY Subscription Agreements, since they are classified as commercial transactions, although they are meant for residential applications). There is no federal credit for residential Solar energy systems (i.e. if homeowners procured the Solar equipment directly without a PPA or Leases attached to the system).
The residential property does NOT have to be the homeowner’s primary residence to be eligible for ITC funds.
CALIFORNIA STATE Rebates
California’s Governor Brown signed Senate Bill SB 700 into law on September 2018 adding $800 million in additional funding for the Self-Generation Incentive Program (SGIP) and extending the program through 2025. The California Public Utilities Commission’s SGIP provides incentives to support existing, new, and emerging distributed energy resources.
SGIP provides rebates for qualifying distributed energy systems installed on the customer’s side of the utility meter. A significant component of the program provides rebated funds to Advanced Energy Storage Systems. Luckily for homeowners intending to install Energy Storage in California, the updated SGIP legislation has made changes to promote major incentives for the residential market, i.e. it pays to be an “early adopter” of residential Energy Storage Systems. Such rebates directly impact the prevailing rates offered by GXG ENERGY, and hence increase your cost savings.
Besides the state-wide SGIP, California currently has 52 financial incentive programs and 30 regulatory programs supporting the adoption of Solar and/or Storage systems. Silicon Valley Power (SVP) for example, offers incentives for the installation of a new grid-connected PV Solar systems. Such incentives directly impact the prevailing rates offered by GXG ENERGY, and hence increase your cost savings.
PROPERTY Tax Exclusions
Property tax exclusions allow businesses and homeowners to exclude the added value of a Solar system from the annual reassessment of their property for taxation purposes. California offers property tax exclusions for installed Solar systems through Senate Bill SB 871 of 2014, which qualifies active Solar systems that are installed before January 1, 2025 to be excluded from reassessment related taxes.