ENERGY GENERATION

Residential Clean Energy Tax Credit

While this tax credit covers multiple types of renewable energy systems, most Florida residents are likely to apply it to solar. Starting in 2023 and extending through 2032, the credit will cover 30% of the costs to install qualifying renewable energy systems — including solar, wind, geothermal, or fuel cell. The credit drops to 26% in 2033, and then 22% in 2034. The credit also covers battery storage technology with a capacity of at least three kilowatt-hours (kWh). Nonprofits and other tax-exempt entities will have the option to apply for a direct-pay option, which will work similarly to the tax refund process. The IRS has created an FAQ that provides more details about this incentive.

To Claim Credit: Fill out IRS Form 5695

Net Metering

Net metering allows solar rooftop users (and those using some other forms of renewable energy) to connect their system to local electrical grids to feed energy back at times when they produce extra. Electric utilities then reimburse these users for that energy, often in the form of credits on their bills. Customers pursuing net metering programs will likely need to sign an interconnection agreement and may have some associated connection fees.

The practice of net metering, as well as the current reimbursement rates, came under fire during the 2022 Legislative Session and are likely to come up for discussion in future sessions. If legislators vote to reduce rates, those who already have systems or install them soon will likely be grandfathered in for higher reimbursement rates for a period of time. Interested parties should check the net metering guidelines of their electricity provider.

Lee County Electric Cooperative (LCEC) Guidelines

Florida Power & Light (FPL) Guidelines

Clean Electricity Investment Tax Credit (ITC) & Clean Electricity Production Tax Credit (PTC) *◊

Businesses and other entities, such as tax-exempt organizations, have options when it comes to renewable energy generation. Starting in 2023, the Clean Electricity Investment Tax Credit (ITC) covers a base 6% of costs for a variety of clean energy systems, which increases to 30% if wage and labor requirements are met. These percentages apply until 2032 and then will ramp down.

Alternatively, the Production Tax Credit (PTC) provides credit for renewable energy produced during the first 10 years of operation and may provide more return in the case of larger energy systems. One or the other may be claimed, but not both for the same project.

There are bonuses for using domestically produced steel and iron, and for siting projects in energy communities for both the ITC and PTC. A bonus for projects installed in low-income communities is also available for the ITC. Tax-exempt entities will have the option to take the incentive as a direct payment. The ITC also applies to — and may be an excellent option for — community-based renewable energy projects. The Department of Energy has created a webpage with thorough information about requirements and comparisons between the two options as they apply to solar, though more types of renewable energy systems are covered by the incentives.

To Claim ITC: Fill out IRS Form 3468

To Claim PTC: Fill out IRS Form 8835

Rural Energy for America Program (REAP) Renewable Energy Systems & Energy Efficiency Improvement Guaranteed Loans & Grants

This incentive from the U.S. Department of Agriculture is meant for agricultural producers and rural small businesses. Rural areas are defined as those with populations of 50,000 or less, and eligible business addresses can be confirmed here (parts of Sanibel, Captiva, and less populous areas in Southwest Florida may be eligible). Loans or grants cover renewable energy systems, including wind and solar, and the purchase, installation, and construction of energy-efficient property improvements. Loans are available for up to 75% of eligible project costs, while grants are available for up to 40% of total costs. The upcoming application deadline is March 31, 2023, with future dates to be announced. More information can be found here.

Solar United Neighbors Guide for Applying to the REAP Program

Check Property Eligibility