| Solar power is generated by converting sunlight into | | | | homes. |
| electricity. This can be done either by directly | | | | For micro turbine systems and residential fuel cells |
| converting sunlight into electricity using photovoltaic | | | | installed on principle homes, a tax credit of 30% of the |
| (PV), or indirectly with concentrating solar power | | | | expenditure incurred and up to $500 per.5 kW of |
| (CSP). | | | | power capacity is offered. In the state of Arizona, tax |
| In the latter process sun's energy is used to boil water | | | | payers who offer energy efficient single-family |
| and then used to supply power, and various | | | | residences are allowed to take a tax deduction of 5 |
| technologies including Sterling engine dishes in which a | | | | % of the sales price of up to $5,000. |
| Sterling cycle engine is used to power a generator. | | | | Similarly the state of New York provides a 25 percent |
| According to the Energy Policy Act of 2005, passed | | | | tax credit on solar energy systems with a ceiling of |
| by the US congress, tax payers who invest in | | | | $5,000 and a 20 percent fuel cell tax credit with an |
| residential solar photovoltaic (PV) systems will receive | | | | upper limit of $1,500. These can be carried forward for |
| tax benefits. | | | | five years. |
| Hence, the solar PV tax credit is applicable to the | | | | The state of Minnesota has gone to an extent of |
| money spent on purchasing and installing a solar PV | | | | providing a 100 percent exemption for solar space |
| system for the generation of electricity for usage in | | | | heat, solar water heat, wind systems and photovoltaic. |
| U.S residences. 30% of the eligible expenditure is the | | | | The worth added to a property by a solar or wind |
| tax credit, which is directly credited to the tax liability | | | | energy system is exempted from property taxes in |
| and not just deducted from the taxable income. Also | | | | the state of Wisconsin. Home-owners, who are eligible |
| the congress passed the American Recovery and | | | | rebates, are not liable to report it as income but can |
| Reinvestment Act (ARRA), also known as the | | | | deduct its amount from their tax basis. |
| stimulus package. | | | | The initial investment on solar power systems can be |
| For a home-owner in Sacramento, Calif., the local and | | | | recovered in a short or a long time. Factors such as |
| federal savings can add up to almost half the price of | | | | the type of solar system, climate, usage and installation |
| a solar power system. The federal Residential | | | | are taken into consideration for reaching a conclusion. |
| Renewable Energy Tax Credit is extended to Dec. 31, | | | | The pay-off period for solar hot water systems can |
| 2016 and covers 30 percent of the amount spent for | | | | be shorter when compared to others. In favorable |
| installing of small wind turbines for residences, qualifying | | | | conditions, such as good climate 3 to 4 years pay-offs |
| geothermal heat pumps and solar installations (solar | | | | are feasible however, on an average the pay-off time |
| water heaters and solar panels). Installations can be | | | | is 5 to 6 years. For PV solar electricity the pay-off |
| established on existing home as well as new | | | | period is much more i.e. 10 to 15 years in many cases. |
| construction and principle residences and second | | | | |