Solar Energy Newsletter Winter 2009 Apex Solar California

Fantastic News for Our Off And On Grid Customers
Solar Energy Tax Credits Can Save You 30%

On 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

A 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 We've Learned
Living Off the Grid

A great little gadget we like is the "Kill A Watt" meter.

The 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.

An Off Grid Perspective
Solar Array Tilt Angle

Much 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 sun.”

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 power.

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 comments and suggestions for upcoming newsletters to farrel@apxsolar.com

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