Category: News

How Many Solar Panels Do I Need To Run My House?

A whole-home solar system is a significant investment but has the potential to generate considerable returns. Solar power can allow you to become energy-independent and realize immense savings on utility bills. Like any big investment, you'll want to know exactly how much needs to be put in to assess if the return will be worthwhile. The first question most homeowners ask is, how many solar panels are needed to run a house? There isn't a one-size-fits-all answer, but some general considerations will help give you an idea.

Capital City Solar can comprehensively assess your home's energy needs and determine how many solar panels are necessary. Wondering how much solar power do I need for a whole-home solar system shouldn't intimidate you from converting to solar energy. Call us for a meeting, and we'll get you the information you need to make informed decisions.

Is a Whole-Home Solar System Worth It?

Harnessing the abundance of solar energy in northern California allows homeowners to achieve energy independence and reduce reliance on the grid and traditional fossil fuels. The results are significant cost savings and the satisfaction of ensuring a reliable and sustainable energy source for the home, regardless of external factors or price fluctuations.

  • Energy Cost Savings - Significantly reduce or even eliminate monthly electricity bills, generating long-term savings on energy costs.
  • Energy Independence - Achieve greater resilience during power outages, mandatory blackouts, and energy price fluctuations.
  • Environmental Sustainability - Solar energy is clean and emits no greenhouse gases or harmful pollutants during operation, contributing to a healthier environment and mitigating climate change.
  • Low Maintenance - Solar panels require minimal maintenance, typically limited to occasional cleaning, to ensure optimal performance. 
  • Long-Term Investment - Solar panels have a long lifespan, typically 25 to 30 years or more. 
  • Reduced Carbon Footprint - Reduce your carbon footprint with clean, renewable energy to combat climate change and positively impact the planet for future generations.

Financial Incentives

Government incentives, such as tax credits, rebates, and net metering programs, can help offset the initial cost of installing a solar system, enhancing its affordability and attractiveness.

California's Net Energy Metering (NEM) program empowers homeowners to earn money by selling surplus energy back to the grid. Excess power generated during sunny periods is fed back into the grid through NEM, effectively spinning the homeowner's electricity meter backward, thus earning credits. This arrangement incentivizes solar adoption and helps homeowners offset the initial investment of installing a whole-home solar system by turning their rooftop into a revenue-generating asset.

Homeowners transitioning to solar energy can benefit from various tax incentives and federal, state, and local rebates. Many local utility companies also provide additional rebates and incentives, making the switch to solar even more financially attractive for homeowners. These combined incentives help reduce the upfront cost of installing solar panels, making renewable energy more accessible and affordable for Californians.

Increased Home Value

Homes equipped with solar panels often command higher resale values and sell faster than comparable non-solar homes. Solar systems are considered desirable features by environmentally conscious buyers seeking energy-efficient properties. 

Whole-home solar systems can command premium prices in the real estate market. Factor in the potential ROI of your home's resale value when considering questions such as, how many solar panels do I need? And, how many solar panels are needed to run a house?

How Much Solar Power Do I Need?

Whole-home solar systems are comprehensive solar energy solutions designed to power an entire residence using sunlight. These systems typically consist of photovoltaic panels installed on the roof or in the surrounding property, along with inverters and batteries for energy storage and distribution.

Determining how much solar power do I need to power a home involves several considerations:

  • Energy Consumption - Analyzing historical energy consumption data helps estimate the average amount of electricity a household requires over a specific period.
  • Location and Climate - Solar irradiance varies depending on geographical location and climate conditions. Areas with more sunlight receive more solar energy, which impacts the size and efficiency of the solar panel system required.
  • Roof Size and Orientation - The available roof space and its orientation relative to the sun influence the number and arrangement of solar panels that can be installed.
  • Panel Efficiency - The efficiency of solar panels affects how much electricity they can generate from sunlight. High-efficiency panels may require less space but could come at a higher cost.
  • Battery Storage - Incorporating battery storage allows for energy storage during daylight hours for later use, reducing reliance on the grid and ensuring power availability during periods of low sunlight or power outages.

Our dedicated technicians are committed to guiding you through every step of the process. We start with a comprehensive site visit to address all your questions and assess your energy needs. During this visit, we'll carefully evaluate your property's layout, orientation, and energy consumption patterns to determine the ideal size and configuration for your whole-home solar system. We can definitively answer your question of how much solar power do I need?

Whether you want to power your entire home or specific appliances and systems, we'll tailor a solution to meet your unique requirements. Moreover, our support extends beyond installation. We're here to assist you throughout the lifetime of your solar system. From routine maintenance to timely repairs and upgrades to accommodate additional power demands as your needs evolve, we're dedicated to ensuring that your solar investment continues to deliver reliable, cost-effective energy for years to come.

Is Solar Power Degradation a Concern?

Solar panel degradation should not deter you from installing a whole-home solar system. Solar panel degradation happens slowly, losing around 10-12% efficiency over a typical lifespan of 30 years. Proper maintenance and cleaning by certified solar panel technicians can mitigate solar panel degradation and make a whole-home solar system a worthwhile investment. 

Professional Services to Mitigate Solar Panel Degradation

Capital City Solar offers comprehensive repair and maintenance services designed to prolong the lifespan of solar panels and maximize energy production. Our team of experienced technicians conducts routine cleaning and output verification. We use advanced tools and processes to identify any issues early on and address them promptly. 

Professional installation and reliable repairs from our company are essential to ensuring that solar panel degradation does not outweigh homeowners' return on investment. With our expertise, homeowners can rest assured that their solar panels will be installed correctly and maintained to the highest standards. 

Schedule a Meeting for a Whole-Home Solar System Assessment

How much solar power do I need? How many solar panels are needed to run a house? These are essential questions to ask when considering installing a whole-home solar system. Capital City Solar can answer all these questions and provide every service necessary to achieve energy independence, from installation to upkeep.

While whole-home solar systems are a considerable investment, the costs can be offset by reduced energy bills and other incentives offered by federal and state governments. Investing in our professional services will also allow you to extend the lifespan of your solar panels and maximize energy efficiency. Start by scheduling a meeting with Capital City Solar and receiving an assessment of installing a whole-home solar system today.

Attaining a Whole Home Solar System

Attaining a whole-home solar system may be a way to live out your values for sustainability, save money on utilities, or both. Getting your household running on renewable energy is a worthy goal with many benefits. Still, a few questions must be answered to ensure the project is feasible and cost-effective in the long run. How much solar power do I need to power my home? How many solar panels are needed to run a house? Will solar pane degradation be challenging to keep up with?

Luckily, Capital City Solar has the knowledge and experience to supply all the information you need when deciding if attaining a whole-home solar system is suitable for you. Our full range of residential solar services in the wider Sacramento metropolitan area will also ensure you maximize your ROI if you choose to make this significant investment.

What Is a Whole-Home Solar System?

A whole-home solar system is a comprehensive setup designed to provide electricity for an entire household using solar power. The system consists of solar panels installed on a home's roof or yard, harnessing sunlight to generate clean electricity.

Whole-home solar systems are scalable and can be customized to meet your household's energy needs.

Whole-home solar system:

  • Provides electricity for the entire household's needs.

  • Typically, it requires a larger number of solar panels to meet energy consumption demands.

  • Includes a comprehensive setup with inverters, meters, and other necessary components.

  • Offers greater energy independence and potential for significant cost savings on utility bills.

How Many Solar Panels Are Needed To Run a House?

How many solar panels do I need? The answer depends on how many solar panels are needed to power a house depends on factors such as:

  • Household Energy Consumption

  • Available Sunlight

  • Geographical Location

  • Efficiency of the Solar Panels

Geographical location and available sunlight can impact efficiency if obstructions, such as tall buildings or trees, are present. Homes near some industrial regions could also experience airborne particles settling on solar panels and restricting sunlight penetration.

Capital City Solar conducts a thorough assessment of every home's energy needs. It considers factors like location, obstructions, and the type of solar panels selected when installing a whole-home solar system. Once the energy needs are determined, our solar installers use various tools and calculations to estimate the solar array size required to meet those needs.

Some of the critical factors regarding this process include:

  • Wattage

  • Efficiency

  • Roof Orientation (Tilt)

Our solar installers use various software programs and other tools to calculate the optimal size of the solar array. This calculation tells us exactly how many solar panels are needed to run a house and supply enough electricity to meet the home's energy demand. Part of our comprehensive services include a system inspection and output verification that can be performed throughout the lifetime of your solar system to ensure efficiency.

How Much Solar Power Do I Need?

The amount of sunlight required to power a whole-home solar system depends on similar factors weighed in the selection and number of panels, including the size of the system, efficiency, and the household's energy consumption habits. Generally, a whole-home solar system needs sufficient sunlight to generate enough electricity to meet the household's energy needs throughout the day and across different seasons.

Northern California is an excellent location for whole-home solar systems because the climate provides ample sunlight throughout the year. Our location enjoys many clear days with minimal cloud cover, allowing for maximum energy production. Many homes have enough surface area for solar panels to be placed to convert sufficient energy for their demands.

Your household's energy consumption may be the most significant factor to consider. Our solar services include battery backup installation to add resilience to your whole-home solar system. Battery backup systems can come in handy during periods of low sunlight, power outages, or if you have an electric vehicle that requires substantial energy to charge. Contact Capital City Solar to assess your home and learn how we can deliver a whole-home solar system to meet its demands.

Is a Whole-Home Solar System Worth It?

Converting your home to run entirely on solar power can require a significant investment in time and money. Transitioning to a whole-home solar system could also require households to adjust how they think about energy consumption.

Though sunlight availability is not typically an issue in Northern California, it could be helpful to understand the concepts of limiting energy-intensive activities for times of peak solar generation and considering energy-efficient appliances and practices to maximize the benefits of solar power. Nevertheless, integrating battery storage solutions offered by Capital City Solar has effectively eliminated our customers' hurdles to adaptation.

The costs of transitioning to a whole-home solar system can be offset in several ways. For example, your home's resale value could rise substantially if it features total energy independence from the public grid. Californians were early adopters of solar roofing technology, and homes with it are always in demand in the real estate market.

Other ways solar power can give a high return on your investment include:

  • Reduced Carbon Footprint - Reducing your impact on the environment is a noble goal. For some people, preserving resources for future generations is reason enough to utilize solar energy at home.

  • Lower Utility Bills - Even when factoring in the costs to repair or maintain solar panels, solar panels can eventually pay for themselves by lowering homeowners' annual energy costs. How much money you save through energy independence will vary depending on current energy costs and your yearly consumption rate. Nevertheless, our high-quality installations will last for decades and provide plenty of time for your investment to pay off in the long run.

  • Safeguard Against Power Disruptions - Solar energy systems can protect your household against various costly and frustrating issues that occur when public utility grids fail. Spoiled food, frozen pipes, damaged appliances, lost productivity, and other problems are less likely to affect your home with a reliable whole-home solar system.

Solar Panel Degradation

Will I have enough sunlight to power my house? How many solar panels do I need? These are the usual questions asked when considering if going off-grid with a whole-home solar system will be worth the cost, but you should also factor in the rate of solar panel degradation and maintenance costs.

Fortunately, solar panel degradation happens slowly. Some brands we install are designed to last at least 40 years, while others can last 25 years or longer before any issues develop. Capital City Solar is a one-stop shop for all your solar panel needs, including assessments, installation, output verification, and cleaning and maintenance.

While high-quality panels will last for decades, some cleaning and maintenance will be required throughout their lifespan to ensure optimal performance and longevity. Northern California and the Sacramento area are generally windy and have many trees. Pollen, leaves, dust, and pollution travel through the air and can build up on panels and obstruct sunlight. Dirty panels alone can cause lost energy output of as much as 10%.

We typically recommend cleaning your solar panels at least once a year. Damage to panels from tree limbs, hail, and even animals is also bound to happen within their long lifespan, affecting energy output. No one is better qualified to clean or repair your complex solar array than the people who installed it, and we service thousands throughout Northern California each year.

An annual service is also a great time to allow us to perform a 30-point inspection to verify energy efficiency. Let us install your whole-home solar system and gain peace of mind that you'll receive expert maintenance and care to achieve peak performance year-round and a maximum return on your investment.

Solar Panels Can Follow You If You Move

Due to the typically long lifespans of high-quality solar panels, it's common for homeowners to be wary of installing them if they plan to buy a new house eventually. While you could recoup some of their cost by increasing the price of your home when selling, you could also take them with you. The process is simple with the removal and replacement for re-roofing services Capital City Solar provides.

Our company specializes in removing and reinstalling solar panels, ensuring that you maximize the return on your investment regardless of your relocation. And, because solar panels can outlive the roof they're installed on, our services extend to facilitating roof repairs or replacements by safely removing and later reinstalling the solar array.

Solar roof installations are intricate, and finding professionals willing to undertake removal and re-installation can be challenging. We have successfully performed these services for hundreds of clients across Northern California. Our team has the expertise and tools to handle the process efficiently and effectively, ensuring your solar energy system operates at peak performance when it is reinstalled on the new roof.

In situations where immediate re-installation isn't feasible, we offer secure storage options for a fee, providing peace of mind during moves or roof repair projects. Our storage facilities are designed to protect your investment until it's ready to be reinstalled, offering a convenient solution to accommodate your needs.

Don't feel as if investing in a whole-home solar system will tie you down. Our removal and re-installation services are second to none regarding safeguarding your solar investment and facilitating seamless transitions. Trust our team to handle the complexities of solar panel relocation with precision and care, allowing you to enjoy the benefits of clean, renewable energy wherever you go.

When Will I Start Seeing a Return on My Investment With Solar Energy?

A great benefit of solar power and energy independence is that you quickly start seeing a return on your investment. The initial cost of installing solar systems has dropped considerably over the years, making the technology much more accessible than ever. On average, it will only take a few years before your savings on electricity bills start making you wonder why you didn't buy in sooner. Also, consider that solar panel degradation is slow, and your system should last 25 years or longer, meaning your savings will have decades to add up to a healthy ROI.

Call Us Today For Energy Independence

Investing in a whole-home solar system brings value and peace of mind. Significantly lower utility bills and the slow rate of solar panel degradation ensure a hefty return on your investment. Our professional team has helped thousands of homeowners around Sacramento and Northern California achieve energy independence. We also provide a full range of solar services, including cleaning, maintenance, removal, and re-installation, to help you feel confident with your transition.

It's common to have so many questions about this technology that you don't know where to start: How many solar panels do I need? How much solar power is necessary? Will it be worth the cost in the long run? Our experts will comprehensively assess your property to answer everything and make you see the value of solar energy. Contact us today to learn more about the extensive services and solutions available from Capital City Solar.

NEM 3.0: A New Law That Will Affect Solar Purchases for PG&E Customers

Starting April 2023, the state of California will be implementing a new version of the net energy metering (NEM) program, known as NEM 3.0. This new law will have a significant impact on new solar purchases in California. On December 15th, the California Public Utilities Commission (CPUC), voted unanimously to approve this new version of the NEM program. In this article we will cover the NEM program, what is changing with the newest version of NEM, and provide some advice for people looking into going solar.

What is NEM and How Does it Work?

NEM is a program that allows customers with solar panels to receive credits on their utility bills in exchange for the excess energy they generate and feed back into the electric grid. These credits can then be used to offset the cost of the energy they consume from the grid, especially during times when their solar panels are not generating enough energy, such as at night or Winter months.

The current NEM 2.0 program has been in place since 2017. It has been super popular with solar customers, as it helps them save a good amount of money on their energy bills through excess energy credits. Because of its benefits to customers, the NEM program, and specifically NEM 2.0, has been a crucial part of the continued growth of renewable energy in California. However, with the increasing number of solar panels being installed, CPUC and the state have decided to update the program with the goal to continue to serve the needs of customers and the electricity grid. Let's dive a little deeper into the new version.

What is Changing with NEM 3.0?

Under NEM 3.0, new solar customers will no longer receive full retail credit for the excess energy they generate and feed back into the grid. Instead, they will receive a lower “time-of-use” credit based on the time of day when the energy is fed into the grid. This means that customers receive a higher credit for excess energy generated during times when the demand for electricity is high, such as a hot afternoon, and a lower credit for energy generated during times when demand is low, such as night or early morning. Overall, the credits earned for excess energy are expected to be about 75% less under NEM 3.0 than they were under NEM 2.0.

This change is designed to encourage customers to generate and feed energy back into the grid during times when it is most needed and to reduce the strain on the grid during times of high demand. However, it also means that new solar customers will likely receive lower credits for their excess energy, which may impact their overall savings from solar.

What Does this Mean for Customers Considering Solar?

For customers considering solar, the implementation of NEM 3.0 means that it is more important than ever to act quickly to take advantage of the current NEM 2.0 program. Customers who install solar before April 2023 will be “grandfathered” into the NEM 2.0 program and will continue to receive full retail credit for their excess energy for 20 years.

For those who wait until after April 2023, the lower credits under NEM 3.0 may impact their overall savings from solar. However, even with the changes to the NEM program, solar remains a smart investment that can help customers save money on their energy bills while also reducing their carbon footprint and supporting the growth of renewable energy. Adding a backup storage system to your solar project is another option for solar customers. A backup battery system provides solar customers more independence from utility companies.

If you are considering solar, we highly recommend speaking with a solar professional as soon as possible to understand the benefits and potential impacts of NEM 3.0 on your energy savings. At Capital City Solar, we have years of experience helping customers make the switch to solar and would be happy to answer any questions you may have; feel free to contact us.

In conclusion, NEM 3.0 represents a significant change to the net energy metering program in California.. For customers looking to install solar, it is important to act quickly to take advantage of the current NEM 2.0 program before it expires in April 2023. For those that are a few years away from considering solar, even with the new law, it will remain a smart investment that can help you save money on your energy bills while reducing your carbon footprint. While the changes to NEM may impact your overall savings, the benefits of solar are still substantial and should not be overlooked.

What are the most common questions homeowners ask when considering solar energy?

As more and more homeowners in the Sacramento Valley and surrounding areas begin to explore the benefits of solar energy, there are several common questions that we encounter. The questions often relate to costs of the system and installation, return on investment, and access to incentives and rebates. In this blog, we will take a closer look at some of the most common questions homeowners have when considering solar energy.

What are the costs associated with solar energy?

One of the most common questions homeowners ask when considering solar energy is about the costs associated with installation. The cost of solar panels and installation can vary, depending on factors such as the size of the system and the location of the home. However, many homeowners can expect to see a return on investment within a few years, and the savings on electricity bills will continue for the life of the solar panel system, which can be 25 years or more. It's important to note that the cost of solar energy has dropped significantly in recent years and continues to do so making it more affordable for the average homeowner.

Are there any incentives or rebates available?

Homeowners also tend to ask about the availability of rebates and incentives, and whether or not they have access to certain programs that lower their overall expenses. The state of California does offer a variety of incentives and rebates to encourage homeowners to go solar. For example, the California Solar Initiative offers rebates for panel installation, and the California Property Assessed Clean Energy (PACE) program allows homeowners to finance their installation of solar panels through their property taxes. For homeowners within their service area, the Sacramento Municipal Utility District (SMUD) offers a stipend for those who install solar panels.

How does the installation process work?

Homeowners often have questions about the process of solar panel installation. Typically, the process will begin with a consultation with a solar panel provider, during which the provider will assess the homeowner's energy needs and determine the optimal solar panel system for their specific home and situation. The solar provider or company will also handle all necessary permits and inspections, and will coordinate the installation of the solar panels. It's vital for homeowners to find a reputable solar panel provider who can guide them through the process and answer all of their questions.

How does net metering work?

Net metering is a billing arrangement that credits solar energy system owners for the electricity they add to the grid, commonly referred to as excess energy. In California, homeowners with a solar energy system are eligible for net metering, which allows them to sell any excess solar energy they generate back to their utility company. This can provide additional financial benefits to homeowners considering solar. The net metering laws change April 2023, read about NEM 3.0 (change link to first article when it is on the website).

What are the maintenance requirements for solar panels?

Solar panels require minimal maintenance, and most solar panel systems come with a 25-year warranty. Homeowners typically only need to keep their solar panels clean by occasionally wiping them down with a damp cloth and ensuring that there are no trees or other objects blocking the sun's rays.

What happens in case of a power outage?

Many homeowners ask about what can happen in the case of a power outage. Some solar energy systems also come with battery backup systems that can store energy generated during the day for use during an outage. Also, when your system is unable to produce the amount of energy needed, such as night time or cloudy days, most solar energy systems are connected to the grid, which ensures access to electricity.

In conclusion, solar energy is becoming increasingly popular in California as more and more homeowners realize the benefits of this clean and sustainable energy source. The costs of solar panels and installation have come down significantly in recent years and many homeowners can expect to see a return on investment within a few years. The installation process begins with a consultation with a solar panel provider, who will handle all necessary permits and inspections and answer any questions the homeowner may have. Net metering is also available in California and allows homeowners to sell excess energy back to the utility company, providing additional financial benefits. Finally, solar panels require minimal maintenance and come with a 25-year warranty, and a backup system is available in case of a power outage.

If you're a homeowner considering solar in the greater Sacramento area, including but not limited to: Davis, Roseville, Rocklin, Granite Bay, Lincoln, or El Dorado Hills, it's important to do your research, find a reputable solar panel provider, and have all your questions answered before making a decision. Solar energy is a smart investment that will not only save you money on electricity bills, but also help reduce your carbon footprint and contribute to a cleaner environment. With a little research and guidance, you'll be on your way to a more sustainable and energy-efficient home in no time.

The Federal Solar Tax Credit is Being Pushed Out: Why You Need to Claim It in 2020

Using the Solar Investment Tax Credit

For most homeowners, the biggest motivators for buying into home solar power are the rising energy rates being charged by PG&E, SMUD, and other utilities. This goes double for anyone being transitioned to time-of-use rates. On average, our customers see energy bills drop by at least 75% after installing a solar power system.

But there are other financial incentives for going solar. One of the best of those incentives currently being offered is the ITC, or Investment Tax Credit. (Please note that we are not tax experts. Please consult with your tax preparer when claiming the solar ITC).

The Investment Tax Credit is a substantial tax credit offered to people who purchase solar power systems for their homes or businesses.

The Investment Tax Credit—sometimes referred to as the Solar Investment Tax Credit—is offered by the federal government to people who purchase solar power systems for their homes or businesses. It’s designed to cut the up-front cost of investing in solar by giving you a partial refund on your solar power system.

It’s important to note that this is not a deduction. Deductions simply reduce the amount of taxable income you have, while tax credits directly reduce the amount of money you owe to the government.

To help show the difference, imagine that you make $60,000 in taxable income this year, and owe $3,000 in taxes. A tax deduction of $3,000 would reduce your taxable income to $57,000, meaning that the taxes you owed on it would be reduced slightly, maybe by a couple hundred dollars.

On the other hand, a tax credit of $3,000 would be subtracted from the $3,000 tax bill, reducing it to $0. That’s a big difference.

The Investment Tax Credit is worth thousands of dollars, but it’s already losing value, and will soon be phased out entirely.

When the tax credit was first created, it was worth 30% of the total cost of purchasing and installing a solar power system. But this 30% rate wasn’t set in stone. On January 1, 2020, the value of the credit was decreased from 30% to 26%. In 2021, the value of the credit will be further reduced to 22%, and the following year, phased out entirely, as shown below:

  • 26% for systems placed in service between January 1 and December 31, 2020
  • 22% for systems placed in service between January 1 and December 31, 2021
  • No credit for systems placed in service on or after January 1, 2022

The seemingly modest reduction from 2020 to 2021 might led some homeowners to think, “Well, I don’t know if I’m quite ready to go solar, but waiting a little bit isn’t a big deal. 22% versus 26% isn’t a big deal.” But even if the total cost of your solar power system and installation is $25,000, a 4% difference comes out to difference of $1,000 in savings. And that loss will come out to much more if you’re planning on installing a larger system (especially one sized to charge an electric vehicle) or are going to replace your roof.

While solar power systems are getting cheaper over time, prices aren’t going down that quickly. You won’t save enough in 2021 by waiting to make up for the reduced value of the tax credit, and you certainly won’t recoup the costly energy bills you paid in the meantime. There are also economic uncertainties to consider. Acting now can help you start saving significant amounts on your energy bill—money you can put away into your savings—while also realizing the full 26% tax credit currently available.

If you plan to go solar while the tax credit is still available, you’ll maximize your savings by acting as soon as possible. This is especially the case because any tax credit can be rolled over into future years. If you qualify for a $9,000 tax credit, but you only owe $3,000 in taxes this year, you can roll the unused $6,000 forward into the next tax year. However, it’s currently unclear as to whether unused credits can continue to be rolled over into the 2022 tax year, after the credit expires. This may mean that if you buy a solar power system in 2021, you won’t be able to roll any unused credit into 2022.

Buying a solar power system in 2020 will give you greater peace of mind, as you will have two years to take full advantage of the tax credit.

The solar tax credit covers not only the cost of solar panels, inverters, and other materials, but also installation and labor costs, home battery systems, and more.

The solar ITC is calculated as a percentage of the cost of a solar power system, solar hot water heaters, and wind turbines. But it covers much more than just the hardware. Other related costs which are incorporated include:

  • Home batteries and other energy storage systems (even if installed after your solar power system)
  • Labor costs for the preparation, assembly, and installation of the system
  • Permitting fees, inspection costs, and development fees
  • Wiring, inverters, and mounting equipment
  • Sales taxes on all eligible expenses

In addition, even some or all the cost of installing a new roof can fall under the umbrella of the solar tax credit, particularly if your existing roof makes it difficult to install a solar power system. The IRS’s instructions for homeowners applying for the solar credit states, “No costs relating to a solar panel or other property installed as a roof (or portion thereof) will fail to qualify solely because the property constitutes a structural component of the structure on which it is installed.”

However, if you’re planning on incorporating the cost of a new roof into your solar tax credit, the roof replacement and solar power installation should occur within a short time frame. The IRS may raise an eyebrow if you make a claim for a new roof, and then wait a couple years to install solar power. It’s also wise to only claim a percentage of the cost of a new roof based on the amount of roof space your solar power system occupies. If your solar power system covers a third of your roof, then you should probably only claim one-third the cost of your roof replacement.

You can also claim some or all the tax credit for installing a solar power system on vacation and rental homes you live in at least part of the time.

Many people also fail to realize that the legal language of the tax credit is fairly flexible. Solar-improved homes eligible for the tax credit are defined as any home, “where you lived… and can include a house, houseboat, mobile home, cooperative apartment, condominium, and a manufactured home that conforms to Federal Manufactured Home Construction and Safety Standards.”

What you need to be careful about is that the credit cannot be claimed for rental properties and other properties which you don’t live in. But if you install a solar power system on a rental or vacation property that you live in for part of the year, you can claim a percentage of the credit. For instance, if you were eligible for a $5,000 credit for a home you live in 25% of the year, you could claim $1,250 of the credit.

But the time to claim the full value of the tax credit is running out. Here’s how much time you have left to qualify for and claim the 26% tax credit:

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How do you qualify for the solar tax credit?

If it’s late in the year when you’re reading this and time is of the essence, you should know that the IRS is a little vague as to what stage of installation establishes the date of ITC eligibility. It’s generally understood that it applies to the date on which the system is approved to operate, though some tax professionals advise playing it safe and using the date your utility connects the system to the local grid. (Note: If you lease your solar power system, the owner of the system will receive the ITC, not you.)

You can claim the credit if you buy a new home with a solar power system installed. In this case, the date you qualify for the credit is the date on which you move into the home. However, you must be the home’s original owner, or be the first user of the system.

How do you claim the solar tax credit and fill out the necessary forms?

How you claim the credit depends upon how you do your taxes:

  • By hand: Fill out and attach IRS Form 5695
  • Using software: Most popular tax software suites include the option to apply for the solar ITC.
  • With a tax accountant or processor: Inform the tax professional handling your taxes that you have had a solar power system installed.

Assuming you're filing your taxes by hand, here's a quick guide on how to fill out your tax forms (though this can be applied to whatever method you prefer. But first, a quick disclaimer: Capital City Solar is not a commercial provider of tax advice. We strongly advise referring to a tax professional. While we are experts at solar power system installation, we are not tax experts. The below is meant to be a rough guide on claiming the solar tax credit, but you are responsible for doing all the due diligence necessary to correctly complete your taxes.

That being said, as mentioned, you'll need a copy of IRS Form 5695, Residential Energy Credit. The linked form is for the 2019 tax year. For those filing in 2020 or thereafter, if the IRS hasn’t automatically updated the form at the above link, you can find a current version of the form here. Note that some details may change from year to year, so be careful when following the below directions.

Form 5695 - Qualified Solar Electric Property Costs

Line 1: Qualified solar electric property costs. This is the single most critical box in the entire form, as this is where you indicate the total cost of your solar power system and related installation costs which qualifies for the solar power credit. If you include things that don't count, and you get audited, the IRS will not be pleased with you. Costs which definitely qualify include the cost of the system (panels, inverters, mounting equipment, etc.), and according to the IRS's instructions for Form 5695, all costs related to the "preparation, assembly, or original installation" of the solar power system, and any "piping or wiring to connect" the system to your home's electrical system and the power grid which services it. Sales tax you were charged for all equipment and labor should also be included in your total. As discussed above, home battery systems can likely be rolled into this (check with your tax professional!). The total of all these costs is entered in the box on line 1.

Line 5: Add lines 1 through 4. Unless you also installed a solar water heating system or other qualifying alternative energy system, simply copy the amount from line 1 to line 5.

Line 6: Multiply line 5 by 30% (0.30). This is where the value of your tax credit is calculated. Multiply the amount in line 5 by 0.3 (30%), and enter the result in line 6. Thus, if your total costs were $20,000, the amount you would enter is $6,000. As discussed above, 2019 is the last tax year for which the solar tax credit represents 30% of total expenses for a solar power system. For tax year 2020, you would multiply line 5 by 0.26, and in 2021 you would multiply by 0.22.

Line 7a: Qualified fuel cell property. Unless you know what this is (check with your tax preparer!), this almost certainly does not apply to you. Check "No," then move to line 12.

Line 12: Credit carryforward from 2018. Enter 0, unless you previously claimed a solar tax credit for an early solar power system. If this applies to you, enter the amount from line 16 of your previous year's Form 5695.

Line 13: Add lines 6, 11, and 12. Odds are that you are not making a claim on a qualified fuel cell property, and you probably don't have a previous solar tax credit. So, you'll just be copying the amount from line 6 to line 13.

Line 14: Limitation based on tax liability.  This is where things can get a bit iffy. You will need to refer to the "Residential Energy Efficient Property Credit Limit Worksheet—Line 14." This is not part of the Form 5695. The worksheet is located on the last page of the Instructions for Form 5695 PDF. The whole reason for this worksheet is that the solar tax credit can only be used to refund on taxes that you've actually paid. You can't get "free money." Basically, the worksheet is used to calculate your total tax liability, and ensure that you only claim that much of a credit. While this worksheet may look a little daunting, it really only matters if you you have any of the fancy tax credits described in lines 2 through 9 of the worksheet. If you do, then you need to fill out the worksheet (or better, have your tax preparer fill it out).

If you do not have any of those tax credits, you can skip the worksheet. Instead, refer to line 11 of your Form 1040. This is where you enter your total tax liability (the amount of tax you owe on your income after the usual deductions). Take that amount, and copy it to line 14.

Line 15: Residential energy efficient property credit. As we said, you can only claim a credit for taxes that you actually owe. Your credit can't be more than you paid/would pay. The instructions state that you should look at lines 13 and 14, and copy the smaller of the two amounts to line 15. This means that if the full amount of your solar tax credit (line 13) is less than your tax liability (line 14), then you copy line 13 to line 15, and you're done with Form 5695, and can skip line 16. If line 13 is smaller than line 14, you do not need to go past line 15. However, if your tax liability is less than your solar tax credit, proceed to line 16.

Line 16: Credit carryforward to 2020/2021/2022. The solar tax credit is designed so that if you cannot claim the full amount of the credit (because you don't owe enough in taxes), that any unused amount can be carried over to subsequent years. If line 15 is less than line 13 (because you could only claim part of the credit this year), subtract line 15 from line 13, and enter the resulting amount in line 16. This is the credit that you will be able to apply to your taxes the following year. Thus, if you have $3,000 in unused credit from 2019, you can apply it to your 2020 taxes.

While the instructions may have made this whole process feel like a lot of work, it actually takes only a few minutes. Below you can see a completed Form 5695 for a homeowner who owed $10,000 in taxes, spent $30,000 on a home solar power system, and claimed a $9,000 credit.

Completed Form 5695 Residential Energy Credit

Now, we're done with Form 5695, but this information needs to be carried over to your 1040! You'll need to refer to Schedule 3 (Form 1040), Nonrefundable Credits. Again, the linked form is for 2018. You should be able to find the appropriate form by going here and clicking "Form 1040 (Schedule 3)." Copy the amount from line 15 of Form 5695 to line 53 of Schedule 3. Any other applicable credits on lines 48 through 54 should be filled out in the appropriate boxes. Then total all the credits and write the total in the box on line 55 of the Schedule 3 form. Then take Form 5695 and Schedule 3 and attach them to your Form 1040.

Okay! Last thing. Take the amount on line 55 of the Schedule 3 form, and copy it to line 12 of your Form 1040, and check the small box immediately to the left. In the screenshot below, the line outlined in red is where the tax credit amount is copied to, and the box to the left that needs to be checked is marked with a red "X."

Form 1040 Line 12Now, fill out the rest of your Form 1040, and you're good to go. You've successfully claimed your solar tax credit and saved thousands of dollars on your taxes (and thousands more on your power bill)! Great job!

If you’re considering purchasing a solar power system for your home, and you would like to learn more about how the solar ITC works, contact Capital City Solar by calling 916-256-2785, or send us a message using our contact form!

Solar Power System Repair: When It Isn’t Working Properly

Solar Power System Serving & Repair

We’re often contacted by homeowners and business owners who know their solar power systems aren’t working properly, but who don’t know what to do next. Oftentimes, they aren’t sure as to who originally installed their panels, whether they’re still covered by warranty, or who can service them.

Here’s a rundown of the common scenarios we see, and who can help you in each situation.

Solar System Installed Under a PPA or Solar Lease

Many people have solar power systems that they don’t own, but which were instead acquired through a power purchase agreement (PPA) or other solar lease option. If you are unsure as to whether this is the case, did you receive the Investment Tax Credit when you acquired your system? If not, then you are likely leasing your system.

If your panels are under a PPA or solar lease, no solar company, including Capital City Solar, should perform repairs on these leased systems. This is because you are renting the system, and thus cannot give us the permission necessary to perform repairs. Only the company through which you are leasing the system can make needed repairs.

However, if your company or finance company is no longer able to service your system, call our office, as we will be able to assist you with your needs.

Solar System Purchased from & Installed by a Company No Longer in Business

Are you having problems with a solar power system that was installed five to ten years ago? If so, the odds are quite high that when you called the phone number on your system’s warranty paperwork, nobody answered the phone.

It’s an unfortunate truth that many solar installation companies only stay in business for a few years. In 2018, we researched 30 of the companies listed by Solar Power World in 2013 as their Top Residential Solar Contractors. Five years later, half of them were out of business, no longer offering residential services, or had been acquired by another company.

Consequently, there is a very good chance that you’ve found yourself in a situation where either your system is no longer under warranty, or it’s under warranty but you can’t reach the original installer. In this scenario, your warranty likely will not cover labor costs. However, Capital City Solar is one of the few local installation companies that will service solar systems we did not originally install. This means that you’ll at least be able to take advantage of your warranty’s coverage of panels, inverters, modules, monitoring equipment, and other costly parts.

Solar System No Longer Under Warranty

There is no one-size-fits-all warranty for solar power systems. Depending on the manufacturer of the solar power equipment, and the company that installed it, labor and the various aspects of your system may be under warranty for anywhere from a few years to over 20 years.

Given that solar power has been widely popular in California for years, we are now seeing systems that are partially or fully no longer under warranty.

But we can still service these systems! In addition, we can help you review your warranty and work with the manufacturer to determine whether some parts are still under warranty, and thus help you reduce the out-of-pocket cost for repairing your system to get it up and running again.

If you would like to learn more about our solar power repair services, or need assistance identifying the warranty details of your system, contact Capital City Solar today!