Winter 2009 Newsletter
Go to the newsletter index or go to the Apex home page.
January 12, 2009
Fantastic News for Our
Off And On Grid Customers
Solar Energy Tax Credits Can Save You 30%
October 3, 2008, the President signed the Emergency
Economic Stabilization Act of 2008 into law (P.L.
110-343). This legislation contains a number of tax
incentives designed to encourage both individuals and
businesses to make investments in solar energy,
including an 8-year extensions of the section 48
business solar investment tax credit (ITC). The
important thing to note here is that the 30% tax credit
during the last two years up to Dec. 2008 had a $2,000
dollar cap for residential property. This cap has been
removed for the 2009 tax year.
The bill extends the 30%
ITC for residential solar property for eight years
through December 31, 2016. Again the new bill removes
the cap on qualified solar electric property
expenditures (currently $2,000), effective for property
placed in service after December 31, 2008. The bill
allows individual taxpayers to use the credit to offset
both regular and (alternative minimum tax) AMT liability
and to carry unused credits forward to the next
succeeding taxable year.
So what exactly is a tax credit? This should not to be
confused with a tax deduction, which is much less
valuable. According to “Wikipedia,” the online
encyclopedia, a tax credit is “a recognition of partial
payment already made towards taxes due.” So this tax
credit applies to property, which uses solar energy to
generate electricity for use in a dwelling unit, located
in the U.S. and used as a residence by the taxpayer.
The taxpayer may claim the credit for 30% of the
expenditures made with regard to the equipment and
installation. So how does this work for you, our
clients? Let's say you have a solar energy system cost
of $26,000 this again includes equipment and
installation. At tax time you would be able to deduct
30% of the solar electric system costs or $7,800 from
your taxes due, by filing a Residential Energy Credit
claim. The IRS form 5695 is attached to one's tax
return. This form is available from the IRS web site at www.irs.gov.
Another important item to
note is that if the tax credit you have is larger than
the tax you owe, any unused credit can be forwarded to
the next tax year. So in our example the tax credit was
$7,800 but say your taxes owed this year were only
$4,000, you would be able to claim an additional $3,800
credit on your next tax year.
Websites to Check Out
great way to get a rough check of how much solar you
need for your home is the web site developed by National
Renewable Energy Laboratory.
Check it out at http://rredc.nrel.gov/solar/codes_algs/PVWATTS/version1/
Helpful Tips & Stuff
Living Off the Grid
A great little
gadget we like is the "Kill A Watt" meter.
It identifies which appliances
in your home are energy hungry.
This device measures the watts
used over a given time from any
plug in appliance.
This is especially helpful when
the appliance is not always
running, such as a refrigerator.
Spotlight on New
The new 120/240V Series
Inverter/Charger from Magnum
new magnum 4400 watt inverter is becoming one of our
favorites. The most attractive feature is the split
phase 120/240 volt output in one very small package.
Although this inverter and its remote do not have all
the bells and whistles that the Outback or Xantrex
systems have, it’s still a very good option for those
homeowners that need both the 120 and 240 volt
requirements. Here are the basic specifications.
- It is a pure sine
wave inverter that is very cost effective.
- No stacking required
provides 120/240 volt output in one unit.
- Comes in 24 or 48
battery voltages, with a built in battery charger.
- It has an optional
port for network expansion, and a remote display.
- The inverter is
backed by a two-year (24-month) limited warranty.
An Off Grid Perspective
Solar Array Tilt Angle
has been written about solar array tilt or sun altitude.
Here’s what's most commonly advised: “To capture the
maximum amount of solar radiation over a year, the solar
array should be tilted at an angle approximately equal
to a site's latitude, and facing within 15° of due
south. To optimize winter performance, the solar array
can be tilted 15° more than the latitude angle, and to
optimize summer performance, 15° less than the latitude
angle. At any given instant, the array will output
maximum available power when pointed directly at the
Although this is perfectly true, we have found that most
folks won’t adjust their solar array throughout the
year. So the solution is to pick one tilt angle for the
entire year. You might guess that a tilt angle somewhere
around the site latitude would produce the most output
over the entire year and you would be correct. But is
this what we really want. For both an off grid and on
grid system the answer is no and here is why.
When designing a off grid
system we look at the winter months, with its short and
cloudy days as a base line. We know we will be getting
the least amount of power from the solar array during
this time. So the size of the array is in part, gauged
by the lack of winter sun. In other words we expect the
system to power our loads during the winter so the array
is larger than would be needed in the summer months.
Also with an off grid
system you have limited amount of storage due to your
battery bank. If the system was designed correctly, your
battery bank should take you through a few days of
cloudy weather before it needs a re-charge. This is
important to note, because once the battery bank is full
the charge controller will reduce the power from the
solar array. This means that unused power from the array
is wasted. With that in mind we can safely say that
during the summer, which has much longer days and more
potential sunny afternoons, you would have an excess of
So we suggest biasing
your solar array tilt towards the winter for max
production during those short days. Then during the
summer, even with the array set to a higher tilt than
optimum, the longer days make up for the loss. We find
that in the summer, we still have more power than the
batteries can hold even with the high tilt angle. We
find a good tilt angle for off grid is to add 7 degrees
to your latitude.
On grid systems can also
work better with a tilt angle other than latitude. With
an on grid system, your goal is to produce as much power
when the cost and thus the credit of utility power is
the most. In a lot of states the utility company has
winter and summer rates. If the summer rate is higher
than the winter rate, the summer angle is where you
should set your array to get the highest credit for the
power you produce. This way you’ll make your power in
the summer at a high credit value and then use it in the
winter when the cost is less. Remember that the grid
will store your energy until you need it.
Please feel free to make
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