Are Solar Panels Refundable and Non-Refundable Tax Credit?

As of this writing, the American solar industry has experienced an incredible bounce back after the pandemic, and prices have declined by as much as 50% or more from recent highs. What was once a luxury item is now affordable for the average home and small business. The demand has been so great that many home and commercial solar installers have run out of stock and are unable to fulfill orders.

With the cost reduction and increased demand, it’s essential to understand the basic differences between residential and commercial solar installations so you can provide the best customer experience possible and ensure a satisfactory outcome for your business.

Here are the most important things you need to know about residential and commercial solar installations. 

Residential Vs. Commercial

Residential solar installation packages typically come with a variety of options, such as the amount of insulation used in the roof and the number of solar cells installed. When it comes to residential solar installations, the sky is the limit as far as the amount of power you can generate. The good news is that the average household has enough room for at least one solar panel, and many have two or three.

On the other hand, if you’re looking for commercial solar installation, you’ll need to choose from a selection of standard roof sizes available from your local roofing contractor. Smaller businesses can take advantage of government loan and tax credit programs to offset the cost of solar installation, but don’t have the extra roof space that residential customers have available. A common misconception among those who aren’t familiar with commercial solar is that it’s hard to install. Nothing could be further from the truth – more and more installers are taking advantage of online resources to get the work done quickly and efficiently while still providing excellent quality.


Residential solar installations are built to last years of heavy use and are backed by the manufacturer and local installers. If your home solar system ever malfunctions, you can typically find the part and have it fixed within a day or two. Some common problems that homeowners have reported include inverter issues, solar panel connections, and low battery warning lights – all of which are fairly straightforward to fix. Most manufacturers and local installers offer one-year parts and labor warranties, so in case you do experience any trouble, you can be sure they’ll stand by you.

On the other hand, commercial solar installations are built to last only a few years and are not designed with the same level of quality, attention to detail, and customer care that residential installations are. In case of a malfunction, you’ll need to find a contractor to come out and inspect the system and offer repair or replacement parts – which could take days or weeks depending on the type and location of the malfunction.


Residential solar installations are created with several layers of safety and protection to ensure that no matter what happens, the homeowner will not be injured by any of the wires or electrical parts inside. Larger systems sometimes need additional protective gear such as additional insulation, special boxes and connectors that are designed to protect against electric shock, and even fences to surround the whole system and protect it from vandalism or accidental damage. If you plan to add more solar panels at some point, then you’ll need to invest in a bigger system that can accommodate the additional energy being produced.

In case a bigger system is beyond your financial means, you can take advantage of government loan and tax credit programs to help you afford it. Depending on your location and what kind of electrical service provider you have, you may be able to get an electrician to come out and help you install a bigger system for free or with very low-cost loans.


Residential solar installations are built with thick, high-quality insulation to keep the homeowner’s living room warm in the winter and cool in the summer. Some of the most common choices for insulation are fiberglass, cellulose, and ceramic tile. If you have a pool outdoors, then you need to keep it insulated so that the water stays cool during the summer months. There are various techniques for adding insulation to pools, including the use of spray-on foam insulation, concrete slabs, and even a few options available in the pool liner market. If you’d like, you can also insulate your attic, garage, and other areas where heat travels well – such as the walls and flooring inside your home.

If your roof is made of tile or has a low pitch, then applying a thick layer of asphalt shingles – again, an insulation material – can result in a significant savings in your energy bills. Just make sure that if you do apply additional insulation, it is done with the proper ventilation in mind to ensure it doesn’t cause any problems.


Residential solar installations are built with high-quality materials and components to be more eco-friendly and sustainable. Some of the most common and leading-edge sustainability choices include:

  • A locally sourced wood or bamboo floor
  • Energy-saving lighting
  • A solar hot-water heater that heats water for showering and cooking
  • Energy-saving appliances such as dishwashers and refrigerators
  • Eco-friendly packaging
  • LED lighting
  • A greywater system that reuses shower water for house cleaning
  • An on-site solar battery system that stores electricity generated during the day
  • Fully integrated systems that combine all of the above
  • Low-flow toilets and fixtures
  • Water efficient landscaping
  • Eco-friendly and recyclable packaging
  • Recycle and upcycle materials
  • LED lighting
  • A home that is powered by 100% renewable energy sources

If you’re curious, then you can look online at eco-friendly residential solar installation providers that can provide you with a free quotation. You’ll find a variety of plans and options to choose from, all with the sustainability focus in mind.

Who Should Get Solar Installation?

Residential solar installations are an excellent choice for homeowners who want to generate their own electricity, save money on their energy bills, and be more sustainable. If you’re in a location that gets a lot of sun, then you’re almost certainly going to save money – perhaps a lot of money – using solar energy rather than traditional electricity sources. 

Who shouldn’t get solar installation? People who want to use their systems frequently – for example, if you plan on using electrical appliances often while the sun is shining – should avoid this option since they’ll be going up against the elements daily. Frequent and/or extended hot-weather exposure can also cause significant damage to the equipment, so be sure that your roof is strong enough to handle the weight of all that insulation and equipment without any problems. Not to mention that some people may find the aesthetic of solar installations to be off-putting.

On the other hand, commercial installations could be a good option for owners of larger businesses who want to generate some extra income or save money on their energy bills without unduly affecting the environment. If you’re in a location that gets cold in the winter and/or damp in the summer, then you’re better off adding insulation and having more heat drawn from the outdoors. In case you want to monitor and control the temperature within your workspace, then you could opt for a controlled-environment cooling system that uses fans and thermostats to regulate the temperature – although this will affect your energy bill significantly unless you’re using a lot of energy-efficient light bulbs.

Tax Credit Vs. Loan Vs. Batch-Pay Plan

Residential and commercial solar installations are two completely different animals when it comes to the tax law. Residential systems get a tax credit of 30% while commercial systems get a loan with 12% interest and have to pay for everything upfront. The best option for a smaller business might be a batch-pay plan where you pay for the installed system in installments with a small monthly payment – say, $100 – over 24 months. This will help reduce the debt you incur and give you a more affordable option.

If you’re curious, then you can look online at eco-friendly residential solar installation providers that can provide you with a free quotation. You’ll find a variety of plans and options to choose from, all with the sustainability focus in mind.

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