The 30% ITC is calculated on the Reimbursed System Cost. That is, the total cost of the system including materials, labor, permits, fees, taxes, shipping, etc. LESS whatever grants or rebates you received. Alternatively, you can treat the grant as separate income to your business, in which case you can calculate the 30% tax credit against the entire system cost. However, in that case you may need to pay Federal income tax on the state grant.
The Emergency Economic Stabilization Act of 2008, H.R. 1424 passed by Congress October 3, 2008 extended and improved the Federal Incentive Tax Credit (ITC) for solar systems for 8 more years through 2016. The American Recovery and Investment Act of 2009 (the Obama economic stimulus bill) signed 2/17/2009 also provides a number of significant new and enhanced Federal incentives. Starting Jan. 1, 2009 residential solar electric and solar thermal systems are eligible for the same 30% tax credit with no cap. The previous $2,000 cap on the Federal tax credit for residential solar and wind systems has been removed. There is now no cap or maximum on the ITC for both residential and non-residential (commercial) systems.
The Database of State Incentives for Renewable Energy (DSIRE) provides grant and incentive information for Federal and every state program in the United States of America.
The Solar Energy Industries Association (SEIA) has produced a very useful guide on use of the Federal tax incentives. Contact Dovetail to obtain a copy of this guide.
The Tax Incentives Assistance Project (TIAP) website sponsored by a coalition of public interest nonprofit groups, government agencies, and other organizations in the energy efficiency field, provides consumers and businesses information they need to make use of the Federal income tax incentives for energy efficient products and technologies. This website has a lots of useful and up to date information.
Click here for more details on Residential Renewable Energy Federal Incentives
RURAL GRANTS: USDA Rural Energy for America Program (REAP)
Renewable Energy Credits (RECS) - Renewable energy credits (RECs), also known as green credits, green tags, or tradable renewable certificates, represent the environmental attributes of the power produced from renewable energy projects. You can sell the RECs generated by your system separately from and in addition to the electricity produced by your system. There are separate credits for solar systems and for wind systems. Currently, Solar Renewable Energy Credits (SRECs) are worth a good deal more than wind RECs.
Click here for exciting details on Dovetail's Solar Renewable Energy Credits (SRECs) purchase program. It can provide substantial additional financial value for your solar electric system.