Installing a PV system at your home or workplace is certainly a lucrative investment. While installing these systems primarily helps you increase your annual financial savings, a majority of people today also look for ways to make money from these investments. But, is that possible?
Available Renewable Energy Incentives in the US
To understand if it’s possible to earn money with your PV system, you need to understand what incentives the US government offers for solar.
Federal Tax Credit
This incentive is implemented across all the US states. The federal renewable energy tax credit allows residential homeowners to receive a 30% rebate credit over all their expenditures related to the installation of a renewable energy system at their homes. This includes all the labor costs, equipment, system installation, and wiring. If, however, the 30% equivalent amount is more than your tax liability, you can carry the remaining amount to your next taxable year.
The most successful scheme, net metering, primarily focuses on offering an electricity credit for every kWh of energy fed back to the grid from a PV system.
The incentive is applied across 38 US states, with a few variations. It’s however important to note here that the incentive doesn’t offer you money or cash but offsets the expended electricity during the non-solar production time with the net-metering rate.
That is to say, if the solar energy produced by your PV system during a month supersedes the total electricity consumed from the grid, you may be eligible to acquire a zero-energy bill for that month. However, some utility companies will still require you to pay a certain amount, regardless of your PV production.
In this billing arrangement, your electricity provider tracks the excess energy produced by your PV system and subtracts it from your utility bill. If you’ve installed a solar panel at your home, you can double up your monthly savings and get a shorter payback period. Utility companies also benefit from this as they can supply the excess electricity produced by your PV system to other buildings on the same grid.
How Net Metering Works
Net metering primarily works in the following ways;
- Your utility company measures the surplus electricity generated by your PV system and posts a credit to your account, which is then applied to your upcoming bills.
- Your home’s electricity meter measures the amount of surplus energy produced by your system. Today, you can easily find power meters, that measure the electricity flow in both directions. If you’ll use them, they’ll tick up when you pull from the grid and measure when excessive energy is being produced.
In both of the above-mentioned scenarios, you’ll only have to pay for your net consumption which is equal to the difference between the electricity generated and the total consumption. However, before installing the system, you need to understand the following details;
- Utility companies don’t cut you a check for the power you’re providing through your PV system. They will only subtract the credits from your utility bill.
- In some cases, the net metering credit during the billing period becomes higher than your overall consumption. If this happens the difference will be rolled over to the coming month.
- A few power companies, tend to roll out credit indefinitely, but they generally have a fixed annual expiration date, which resets your credit balance.
- Try to increase your credits during the summers with surplus energy generation and use it during the winters when the solar power generation is relatively low.
- To achieve the best results, your solar panel has an adequate power generation capacity to cover your home’s annual consumption. Oversize your solar array, won’t benefit you’ll get a large portion of your unused credit at the end of every year. Simply put, homeowners can’t overproduce the electricity and charge their power distribution company every month.
- If your utility company allows you to choose the expiration date of your yearly net metering credits, try to set the date after the end of winter. This will allow you to avail all the energy credits you acquired during the summers.
Solar Solutions in Portland ME
All Solar Energy Solutions, LLC has a team of solar and heat pump installers who offer premium quality, reliable solar panel services at competitive rates.
Contact their solar panel contractors in Portland, ME, for all your queries regarding solar technology.