Renewable Energy Incentives

The ‘Big Two’ are the 30% Federal Income Tax Credit

and the Xcel Energy Solar Rewards* Program. 

Xcel Energy Solar Rewards* Program

SOLAR ELECTRIC (PV) 

Residential and commercial Xcel Energy customers eligible

Solar Rewards* website 

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Xcel Energy's Solar Rewards* Program provides two separate incentives for customers who install grid-connected photovoltaic (PV) systems sized up to 120% of the average annual load of their homes and facilities.  Customers will receive an upfront rebate payment, plus a separate payment for the renewable-energy credits (RECs) produced by their system.  For systems up to 500.0 kW DC, Xcel will provide a rebate at the time of installation of $2 per Watt (W).  
 
All REC purchases are for a period of 20 years unless other legal provision supersedes.  The size of the REC payment depends on the size of the system and the owner of the system as shown below.  These payments will step down over time as distinct MW levels are reached for each system classification.  The follow REC payments are in effect as of November 9, 2009.  Check the website above for current REC pricing.

  • Customer owned systems 0.5 kW – 10.0 kW DC: $1.50/W (upfront payment)
  • Third party owned systems 0.5 kW – 10 kW DC: $0.11 per kilowatt-hour (kWh) of actual production (paid monthly)
  • Customer owned or third party owned systems 10.1 kW – 100.0 kW DC: $0.115/kWh of actual production (paid monthly)
  • Customer owned or third party owned systems 100.1 kW – 500.0 kW: $0.115/kWh of actual production (paid monthly)
  • Customer owned or third party owned systems > 500.1 kW: determined through competitive bid process.

Complete Solar Rewards Program Summary

30% Federal Income Tax Credit

SOLAR AND SMALL WIND 

All residential federal taxpayers eligible

HOW TO GET YOUR 30% TAX CREDIT

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Consumers who install solar energy systems (including solar water heating and solar electric photovoltaic systems), small wind systems, geothermal heat pumps, and residential fuel cell and micro-turbine systems can receive a 30% tax credit for systems placed in service before December 31, 2016.  There is no longer a cap on how much the tax credit can be.

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A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed.  Consumers can itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government.

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Components of the Energy Improvement and Extension Act passed on Oct. 3, 2008:

  • Eight more years for the 30% ITC for residential and commercial solar installations
  • Elimination of the tax-credit cap for residential solar-electric installations
  • A new eight-year 30% ITC for residential and commercial small wind installations, with a $4,000 cap
  • A one-year extension of the wind production tax credit
  • Addition of a tax credit of up to $7,500 for plug-in hybrid electric vehicles
  • A one-year extension of energy-efficiency ITCs for new and existing residences Provisions allowing utilities to benefit from the credits
  • Provisions allowing Alternative Minimum Tax filers to take the tax credit
  • Authorization of $800 million for clean energy bonds for RE generating facilities