Tax Benefits of Residential Solar Power in Florida

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    History of Florida Solar Power Initiatives

    • The Florida State Legislature established the Florida Solar Energy Center during the energy crisis of the mid-1970s, with a mission to research energy alternatives and certify solar energy systems. In 1997, the state introduced a sales tax program to provide incentives for homeowners who purchase and install residential solar electric systems. The Florida Energy Act, signed into law in 2006, established the Solar Energy Systems Incentives Program, which provides rebates for solar thermal or solar electric panel systems installed on homes or businesses.

    Federal Tax Incentives

    • Florida residents can receive a federal tax credit for installing solar power systems under the provisions of the American Recovery and Reinvestment Act of 2009. The program allows taxpayers to take a 30 percent credit on their federal tax returns for the cost of materials and installation of solar electric and water heating systems. Originally established in the Energy Policy Act of 2005, the tax credit was extended for residential systems installed through 2016. Previously, the tax credit included an expenditure cap of $2,000, which the Emergency Economic Stabilization Act of 2008 removed, allowing homeowners to receive a credit for the total cost of materials and installation costs associated with solar systems.

    PACE Financing

    • The Florida Property-Assessed Clean Energy (PACE) financing program allows Florida homeowners to receive funding from municipal and county governments for material and installation costs associated with solar power systems. Program participants receive fixed-rate financing, which they pay back through their property tax payments. Homeowners can pay back funds over a maximum 20-year period, and the PACE financing remains with the home. In the event a homeowner sells a home that received PACE financing, the new homeowner must assume the loan payments through their property tax billing.

    Florida Sales Tax Incentives

    • Florida began exempting solar energy systems from sales and use taxes under the Renewable Energy Technologies Sales Tax Program, which began in July 1997. The tax credit applies to any solar energy system that collects, stores, converts or transfers solar energy for heating and cooling or water heating. Solar equipment vendors must document tax exempt sales. Consumers must purchase equipment from a list of eligible products certified by the Florida Solar Energy Center.

    Certified Materials and Installation

    • Florida solar incentive programs require the installation of materials certified by the Florida Solar Energy Center. The center maintains an online database of solar manufactures that make products meeting incentive qualifications. The Florida Solar Energy Industries Association operates an online member directory, from which consumers can find qualified solar system installers.

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