Understanding the Price of Solar
The cost of a solar array ultimately revolves around the total size needed to offset your electrical bills. The first question to ask yourself is how much of your current electrical bill would you like to offset with solar?
Most residential homeowners will make solar investments ranging from $15,000 to $30,000 to eliminate 100% of their electric bill. Larger homes that use more energy and have higher electric bills will require a larger solar investment, while smaller homes with lower electric bills require a smaller solar array.
Tax Credits for Solar
Install solar for a fraction of the cost with solar tax credits. Solar tax credits are a dollar-for-dollar reduction in the income taxes that an individual or business claiming the credit would otherwise pay the federal government. The federal ITC (Investment Tax Credit) is based on the amount of investment in solar property, equal to 30 percent of the basis that is invested in eligible solar property.
Our team will identify all tax incentives and any other financial benefits that would give you the fastest solar payback.
Solar Financing Options
When considering solar, most customers find their personal bank to be the best place for a loan. Typically customers will pay for their solar array through a combination of savings and a home equity loan through their current mortgage lender or bank. Occasionally customers shop around for the best interest rate or other financing models.
Below are a few examples to explore:
NATIONAL SOLAR FINANCE OPTIONS
USDA REAP Program
Grant/Bridge-Loan Combination (time sensitive, limited availability)
The USDA REAP (Rural Energy for America Program) is open to agricultural producers and rural small businesses, including rural electric cooperatives. To be eligible, you must be actively involved in the business and the proposed project. With the new final rule issued in December 2014, it is no longer required to show a “demonstrated financial need” for grant funding. Farmers must derive the majority of their income from farming. Contact your local USDA office for more information.
Admirals Bank National Solar Loan
FHA Title 1 Loan (federal home improvement loan)
This loan program is available for homeowners to finance and purchase home solar and renewable energy systems. The full benefits of solar and renewable systems, in all cases, go to homeowner (including tax credits). Works kind of like a bridge-loan capping at $25k, with an additional 15k available to qualifying customers. Contact Admirals Bank Renewable Lending Department for more information.
Investment Tax Credit (ITC)
The ITC (Investment Tax Credit) is a 30 percent tax credit for solar systems on residential (under Section 25D) and commercial (under Section 48) properties, and is a dollar-for-dollar reduction in the income taxes that a person or company claiming the credit would otherwise pay the federal government.
IOWA SOLAR FINANCE OPTIONS
Iowa Energy Center Loan Program
Combination Loans (Iowa residents & businesses only)
Successful applicants of the Iowa Energy Center Loan Program receive a low-interest loan from a combination of Energy Center and lender funds. The Energy Center provides loan funds equal to 50% of the project’s financed cost (up to $1 million) at 0% interest. Matching financing must be obtained from a lender of the applicant’s choice. The lender manages the entire loan and arranges repayment to the Energy Center. Contact the Iowa Energy Center for more information.
Iowa State Bank & Trust – Solar, Wind, & Geothermal Loans
Low Interest Loan for Renewable Generation (Iowa residents & businesses only)
The Iowa State Bank & Trust – Solar, Wind, & Geothermal Loan Program is available to qualifying home and business owners. Low interest rate locked for first 5-years, no origination fees or closing costs. Customers own their renewable system so they can claim the tax credit benefits. Longer term loans available. Contact Iowa State Bank & Trust in Fairfield for more information.
Jefferson County Revolving Loan Program
The Jefferson County Revolving Loan Program Low Interest Loan for Energy Efficiency Upgrades (residents of Jefferson County only) is open to any resident and business interested in upgrading old appliances, weatherization, and renewable energy projects like Solar or Geothermal. The Fairfield Economic Development Association and the city’s Go-Green Plan work together with local lending institutions. Participating banks include: Community First Credit Union, First National Bank, Iowa State Bank, Libertyville Savings Bank, and MidWestOne Bank. Contact one of these Fairfield branches for more information.
Iowa State Tax Credits
The Iowa State Tax Credit covers 15% of the total system cost. The credit is based on the federal ITC total, and the tax payer may claim up to 50% of the value of the ITC up to $5,000 on residential installations.