Today, everyone understands the importance of going green and finding energy-saving alternatives to traditional power and electricity sources. Solar panels are immensely popular for businesses and homes, and there are several solar panel grants and loans that can help you get them. Additionally, the government offers nice incentives for people to take advantage of these solar panel grants and go green.
If you’re considering making the switch to solar energy for your home or business, this will be your definitive guide. Not only will we go over the various solar panel grants, loans and mortgages available, but we’ll touch on the history of solar, and talk about the benefits. This way, you can decide for yourself if renewable energy is the way to go or not for your home or business.
- The History of Solar Energy Usage
- 11 Solar Panel Grants, Loans, and Mortgages
- Green Retrofit Solar Panel Grants
- High Energy Cost Solar Panel Grants
- REAP Solar Panel Grants (Rural Energy for America Program)
- Renewable Energy Solar Panel Grants
- Tribal Energy Program
- FHA PowerSaver Solar Panel Loan
- Multi-Family House Loan
- Rural Utilities Service Electric Program
- Conventional Energy Efficient Mortgage
- FHA Energy-Efficient Mortgage
- VA Energy-Efficient Mortgage
- Incentives to Get a Solar Panel Grant
- Accelerated Depreciation
- Cash Rebates
- Investment Tax Credit for Solar
- Performance-Based Incentives (PBIs)
- Solar Renewable Energy Certificates (SRECs)
- State Tax Credits
- Subsidized Loans
- Federal and State Tax Exemptions
The History of Solar Energy Usage
Did you know that solar energy use has a history that stretches back to the 7th century B.C.? At this time, people utilized magnifying glass material to light fires using sunlight. The Romans and Greeks used mirrors to harness solar power in the 3rd century B.C. during their religious ceremonies. They referred to them as burning mirrors, and the Chinese used these mirrors for the same reason in 20 A.D.
Sunrooms are another early use for solar power. The sunrooms used large windows to direct sunlight into the room at a concentrated point, and you’d see it a lot in Roman bathhouses. They used south-facing windows to heat the rooms. The Anasazi built south-facing homes on cliffs to keep their homes warm in the cooler months in the 1200s A.D.
Sunrooms are popular today all over the United States, especially in the southern U.S. where people use them as pool rooms.
During the 1700s and 1800s, scientists and researchers powered ovens using sunlight, and they created solar powered steamboats. The debate on who invented solar panels as we use today is up in the air. It’s widely believed that several scientists developed them over years using previous research. Some people credit Edmond Becquerel. He was a French scientist who found that light can boost the generation of electricity when he put two metal electrodes in a conducting solution. This finding influenced PV developments in later years.
Willoughby Smith found that the element selenium could act as a conducting solution in 1973. This led two other scientists to find that selenium could create electricity when they introduced sunlight. These two scientists were Richard Evans Day and William Grylls Adams. In 1883, Charles Fritts used selenium wafers to create the very first solar cells.
Today, solar cells switched from using selenium to silicon. In 1954, silicon solar cells were invented at Bell Labs by Calvin Fuller, Daryl Chapin, and Gerald Pearson. Many people believe this was the first actual instance of PV technology because, for the first time in history, their solar cells powered a small electrical device for a few hours at a time. These first solar cells could only convert sunlight at a rate of 4%, and this is smaller than a quarter of what modern solar cells can do.
Today, solar cells or solar panels are widespread around the world in homes and businesses of all sizes. The government encourages people to make the switch to solar over traditional electricity because of the green movement that took the world by storm.
Solar panel grants can get you panels that you can attach straight to the roof or sit on the ground and power the house through wires.
11 Solar Panel Grants, Loans, and Mortgages
Depending on your home or business, you could be eligible for a solar panel grant or loan from the government to help finance the installation and maintenance of solar panels. Generally speaking, the U.S. Department of Energy has an Office of Energy Efficiency and Renewable Energy that outlines a huge database that outlines current and past solar grants and loan opportunities.
In turn, people can go to this website and get a good grasp on the particular solar panel grant formats. The database also has a consistent outline of the different eligibility requirements attached to each solar panel grant and loan. If you’d like to stay up-to-date on the newest solar panel grants, you can sign up for their email list to get notifications. The biggest solar panel grants and loans include but are not limited to:
Green Retrofit Solar Panel Grants
Green Retrofit Solar Panel Grants are sponsored by the U.S. Department of Housing and Urban Development (HUD). The Office of Affordable Housing Preservation operates under the HUD umbrella, and it targets people who own their own homes in low-income areas around the United States. The goal of this grant is to help these homeowners install and upkeep their alternative energy sources. These energy sources include things like solar panels.
The Housing Recovery Act is the entity that disburses the $250 million budget used for this grant. Any recipients of this grant must spend the funds within two years of receiving them. If there is leftover money, you can use it for routine upkeep of your solar panel system.
High Energy Cost Solar Panel Grants
The High Energy Cost Grants come from the U.S. Department of Agriculture. This department created these solar panel grants specially for rural communities around the United States. The goal of this program is to improve energy generation in these rural communities that have very high energy costs. You can use the funds from this solar panel grant to buy, build, install, improve, repair, and replace any system that improves your energy distribution and creation rate. It includes on and off-grid homes and businesses.
To be eligible for this solar panel grant, the energy usage in your community has to be greater than 275% of the national average. The community has to be in a U.S. state or territory, and several businesses can apply. It works for for-profits, non-profits, Federally recognized Tribal entities and Tribes, and governmental or state entities.
Older light bulbs and systems can cause abnormally high energy usage, and solar panel grants can help you install new systems to save money.
REAP Solar Panel Grants (Rural Energy for America Program)
Available from the U.S. Department of Agriculture, REAP Grants target small businesses in rural areas and agricultural producers that get at least 50% of their income from the agricultural sector. Under this grant, you can get up to $20,000 for your small business or farming operation. You use these funds to help you buy and install your solar panels.
In order to qualify for this solar panel grant, you have to prove that at least 50% of your yearly income comes from agribusinesses. Additionally, you have to prove that you can pay for 75% of the project’s cost from your own funds without setting your business back if you want the grant. If you want a loan or a loan and grant combination, you have to fund 25% of the project. If you have any outstanding debt, debarment, delinquent federal taxes, or judgements against you, you won’t qualify. The application is open all year round for people to apply.
Renewable Energy Solar Panel Grants
The U.S. Department of the Treasury monitors and disburses the funds for this solar panel grant. You may know the Renewable Energy Grant as the 1603 Program. The government entices people to apply and obtain this grant by offering a reimbursement incentive. Instead of giving you tax credits for installing a solar panel system, you can use this grant money to reimburse some of the costs you incurred by installing your solar panels.
You will need to supply enough money to install the solar system on your own. Once you have it in and up and running, you can apply for this solar panel grant. It’ll look at the amount of money you spent to install the system and reimburse you a portion of it.
Tribal Energy Program
The Tribal Energy Program and solar power grants comes from the U.S. Department of Energy, from their Office of Indian Energy Policy and Programs. The goal of this program is to help tribes around the United States achieve their fuel-neutral and technology projects. The program has over $15 million in new investments available for funding.
Using this $15 million, various tribes can apply and request help to obtain and install energy-efficiency measurements for buildings belonging to the tribe, install energy-generating systems, and set up community-scale energy generating systems. Additionally, it can also help with energy infrastructure, setting up integrated energy systems, or set up community-scale energy generating systems.
Small and large tribes can take advantage of solar panel grants to upgrade their buildings.
FHA PowerSaver Solar Panel Loan
The FHA PowerSaver loan comes from the Federal Housing Administration, and the U.S. Department of Housing and Urban Development disburses the funds. THis loan helps people make energy-efficient and cost improvements to their homes. This includes buying and installing solar panels. Under this loan, you can borrow up to $25,000, and you get 20 years to make HUD and FHA-approved energy improvements to your home. With the funds, you can install thermal and solar PV systems.
The FHA will guarantee this loan up to 90%, and the money comes from a private lender. If you have an FHA 203k first mortgage, you’re also eligible to apply for this loan. You can apply when you refinance or purchase your home. You’ll have to pay a fixed interest rate that starts at 5% and goes up to 10%, and you have to have a credit score of at least 660 to qualify.
Multi-Family House Loan
Since this isn’t a solar panel grant, you’ll have to repay it, but the Multi-Family Housing Loan comes from the U.S. Department of Agriculture. They created this loan to target rural rental housing. The housing must be for moderate or very-low income families, people with disabilities, and the elderly.
This loan works as a direct mortgage, but you can also get a loan if you’re a homeowner who wants to install or implement solar energy systems at your multi-family housing unit in rural areas. When you take the loan out, you have 30 years to pay it back. The program accepts applicants on an annual basis, and you can use it to improve or buy land as well as installing solar panels.
Multi-family homes can burn a lot of electricity, so solar panel grants can help curb it and lower the costs.
Rural Utilities Service Electric Program
Known as the RUSE program, the U.S. Department of Agriculture oversees it. It operates as a loan guarantee and loan program. You can use the funding you get from this program to construct, generate, and transmit renewable energy systems. However, this program isn’t open to individuals. You can only apply for this program if you operate under a state, corporate, territory, people’s utility district, nonprofit, or a municipality.
There is no set amount for this program. When you fill out your application, the type of entity you are and what you want to use the funds for will determine the amount of money you get from the program.
Conventional Energy Efficient Mortgage
The Conventional Energy Efficient Mortgage gets funding by private lenders who sell loans to Frannie Mae and Freddie Mac. A homebuyer can borrow up to 15% of their home’s appraised value, and homes that gain an energy star certification get a 5% increase. To qualify for this mortgage, you have to meet the income guidelines. Additionally, you have to buy an energy star-approved home. You can use the funds to buy the home or make improvements on it.
With this loan, you get to increase your buying power to buy your energy-efficient home. The lender will increase your income by whatever amount they estimate you’ll gain in energy savings. This can be a decent jump in income, and it can help you get into a larger home.
A conventional mortgage makes solar panels and energy-efficient systems possible for people of all income levels.
FHA Energy-Efficient Mortgage
Any FHA Energy-Efficient Mortgage recipients are allowed to add 100% of the costs associated with making energy-efficient home improvements onto their existing mortgage. Private lenders allow you to make this loan, but the FHA will insure them. Previously, this loan capped at $8,000, but the program now sets the funding limit by finding out 5% of the property’s value, 150% of the Freddie Mac loan limit, and 115% of the single-family house median area price.
To qualify for this mortgage, you have to meet the FHA’s income requirements. You have to make your monthly mortgage payments, and any victim of a presidentially declared disaster is eligible. You have to live in a one-unit detached house. When you buy the home, you have to have enough to cover a 3.5% down payment. If you do, this mortgage will cover efficiency improvements, mortgage insurance premium, and closing costs.
VA Energy-Efficient Mortgage
A VA Energy-Efficient Mortgage works in tandem with the VA Home Loan Guarantee Program. When you plan to make energy-efficient changes to your home, you can borrow up to $3,000 if you submit proof that shows contractor bids. You can get up to $6,000 if you can prove that your projected energy savings will surpass the increase in your mortgage payments. The VA guarantees a portion of this mortgage, and it comes from a private lender.
To be eligible for this mortgage, you have to be either a member or the reserves, a qualified military personnel, or a veteran. You have to provide your eligibility certificate from the lending office to a private lender. The private lender you choose has to have the approval of the Department of Veteran Affairs. You can use the funds from this program to take energy-efficient measures in your home like installing solar heating and cooling systems or any pre-approved measures that’ll lower your utility costs.
Solar panel grants and mortgages for veterans make housing more affordable while raising the homes value.
Incentives to Get a Solar Panel Grant
As you can see, it can be challenging to get a solar panel grant, so why do people choose to jump through the various hoops? There has to be more to it than just lowering your utility costs, right? The truth is, there are several nice incentives available from the government that prompt people to make the switch to more energy-efficient systems in their homes and businesses. We’ll outline them below.
Accelerated depreciation allows many businesses to use the MACRS (Modified Accelerated Cost Recovery System) to write off their solar energy system’s value. In turn, this reduces your business’s tax burden and you get an accelerated return on your original investment. You can perform a cost recovery on certain solar energy equipment as long it qualifies for a period of five years. This accelerated depreciation can reduce or total solar system cost by as much as 30%.
There are various cash rebates available for any utility company, municipality, state, or other organization that wants to promote green technology and switching to solar. The rebates tend to only be available for a very short amount of time, and the rebate programs end when the entity gets a set number of systems installed. These cash rebates can take the costs of installing and maintaining your energy-efficient system down by 10% or 20%.
Cash rebates can save you hundreds or thousands of dollars by reimbursing you part of the costs you incurred by installing this energy-efficient system.
Investment Tax Credit for Solar
The federal government offers the Investment Tax Credit (ITC), and this is a solar tax credit. This credit helps businesses and homeowners deduct a part of their solar costs from their yearly taxes. Businesses and homeowners both qualify for this tax credit, and it has a maximum cap of 26% of the total cost of your solar panel system. If you get cash rebates, you deduct them from the total cost of your solar system. This program will end in 2022.
Performance-Based Incentives (PBIs)
Some utilities or states have performance-based incentives that pay any person who owns a solar energy system a per-kilowatt hour credit for any electricity that their solar system produces. Some programs require that you have certain equipment made in your state in order to qualify for this incentive. These incentives don’t have to be sold through a specific market, and your rate will depend on when you had the system originally installed. This incentive can exist alongside or replace net metering policies.
Solar Renewable Energy Certificates (SRECs)
In certain states, the law requires utilities to use solar power to generate a certain percentage of their monthly electricity amounts. If you reside in one of these certain states, you’ll get a SREC for however much electricity your solar system produces. Your utility company will buy these certificates from you, and they can then use the solar power amount your system generated to help them hit their monthly number. Depending on how much solar power the utility company buys, this can result in hundreds or thousands of dollars for you.
You can use solar panel grants to save even more money by participating in the SREC program with your local utility company.
State Tax Credits
If you install a solar panel system at your home or business, some states will give you several tax credits. When you get a solar state tax credit, you can deduct a set amount of installing and maintaining your solar system from your state tax bill. The amount varies by state, and it works similar to the ITC program.
If you want to switch to a solar panel system, you could qualify for a subsidized loan to help finance your purchase. This loan comes with a lower interest rate, and this can save you money. A non-government organization, you state, or your utility company may offer these loans. However, they usually have a very limited availability, so it’s a good idea to monitor them and apply as soon as you see them become available.
Federal and State Tax Exemptions
A few municipalities and states don’t include your solar panel system’s value when they perform a property tax assessment. This is good news. It means that the solar panel system can boost your home’s overall value without increasing your property taxes. Also, your new solar panel system may not have state sales taxes attached, and this can result in more money saved.
Solar panel grants are an excellent option for anyone who wants to make their home or business more energy-efficient. These solar panel grants make the installation process more affordable, and we outlined several of the most popular ones. Look through them and see which one works best for your situation and watch the savings stack up.