California Rebates 2007-2016: A New 10-year Program

www.gosolarcalifornia.ca.gov/csi/index.html

Currently PG&E offers a generous cash rebate on new solar electric systems, up to a
maximum of $1.90 per watt of solar, currently covering up to 25% of the total costs. To be
eligible the system must offset utility power, use eligible equipment, and have a ten-year warranty.

Because the solar rebate program is a two-part process, systems do not have to be installed, or
even fully paid for, in order to have a cash rebate “reserved” in your name for a solar electric
system. After a rebate is reserved, the installation must be complete within 12 months or it will
expire. (For solar systems being installed on new construction projects, an extended deadline period
of 18 months is given. In order to qualify for the extended rebate, purchasers must have a “new
construction” building permit already in hand.) The only commitment we require to reserve a rebate,
and hold the price, is a 10% deposit. We handle all rebate paperwork on our customers’ behalf as
well as all PG&E interconnection paperwork, plus pulling the required local building permit.

*** WARNING!!! ***

The $1.90/W rebate level funding is projected to be depleted sometime in November or December 2008.
As soon as a specific total amount of rebates has been reserved for PG&E’s residential customers at the existing $1.90/W level, the current rebate will then be reduced to $1.55/W. This is a 18% reduction in rebate, but if a rebate reservation is submitted before the rebate drops, the purchaser of an average-sized home system could save anywhere from $300-$3,000. Submitting a complete rebate reservation application before October 1st is the best way to make sure your solar rebate is reserved at the higher $1.90/W level.

Federal Tax Credit for All Solar Systems Installed in 2008

The federal government is still offering a 30% Solar Energy Tax Credit for property owners
that install a solar electric system in 2008. For residential solar electric systems, the tax credit is
capped at $2,000. Commercial systems are uncapped. The credit is filed only once, for the tax year
during which the system was installed. If your federal taxes are less than the available solar tax
credit, any excess tax credit can be carried forward. Also available in 2008 is an additional 30% tax
credit (also capped at $2,000) for residential solar hot water systems.

Added Propery Value is Tax-Exempt for Installations Done in 2008 or 2009

According to the National Association of the Remodeling Industry, Appraisal Journal, the
Electric & Gas Industries Association, Wells Fargo Bank, SMUD, as well as many local
appraisers, the addition of a utility-connected solar electric system will instantly increase a
property’s value anywhere from 45%-100% of the full pre-rebate value of the system. The
increased resale value of a solar-powered property can allow a property owner to recoup the initial
cost of the system and possibly more, making early payback happen when the property is sold! Solar
systems don’t require a 10-20 year commitment in order to reap the financial rewards. As an
example, if you sell a solar home in six years, then the payback is six years - plus all the utility bill
savings in between.

Plan It Solar is working on maintaining a list of solar-knowledgeable appraisers to help ensure that
you receive the proper return on your solar investment, if and when you choose to sell your solar
property. As a side benefit, by law (CA Tax Code Section 73) the increased property value from a
solar system installed as a retrofit before January 1st, 2010 is exempt from property tax. That’s right:
increased property value without increased property tax. Due to expire at the end of 2005, this state
property tax provision was extended through 2009.

Solar Businesses: 30% Federal Tax Credit plus 5-yr Accelerated

The federal government also offers businesses a tax credit equal to 30% of the pre-rebate cost
of installing a solar system, with no dollar cap on the credit! Even home-based businesses qualify
but at a reduced benefit, calculated using the ratio of office space versus home space. As an example,
if someone has a home office or business that uses 25% of the total home area and they install a
system for $40,000, the uncapped federal tax credit is calculated against only 25% of the $40,000
total solar system cost. The credit may not be claimed for energy property used by a tax-exempt
organization, but they may lease a system that was paid for by a business entity who does qualify.
Solar energy systems for businesses also qualify for the 5-year Modified Accelerated Cost
Recovery System (MACRS) depreciation deductions (IRS Form 4562). See Section 168 of the
Internal Revenue Code. Currently solar energy systems are classified as 5-year properties. The state
of California also offers accelerated depreciation on commercial solar installations, with a difference
acceleration model for corporate and non-corporate businesses. Check with a qualified tax preparer or
accountant for accurate advice.

For additional information, visit these websites:
www.gosolarcalifornia.ca.gov/
www.dsireusa.org
Or contact Plan It Solar at:
info@planitsolar.com (530) 432-3776

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