In late 2015 prospective solar customers were given a Christmas present—a hefty tax credit for the installation of solar panels. Thank you, Congress. Regardless of your current interest in converting your energy source, hearing the words “tax credit” should cause your ears to perk up and do a little casual research.
The federal solar tax credit currently allows homeowners to deduct 30 percent of the cost of installing a solar energy system from federal taxes. In efforts to expand the solar industry and allow it to reach full market value, this credit applies to both commercial and residential systems.
What’s even better? There’s no limit on the returned value. Thanks to this temporary incentive, the average solar shopper saves over $5,000 by converting to solar power.
What Does it Take?
How can a homeowner take advantage of this? By meeting the following requirements:
- The system must be installed by December 31, 2019.
- You must own your home.
- Your federal tax liability must be sufficient to qualify for the 30% tax credit.
- You must personally own your system.
Many third-party companies offer leasing options to homeowners, so a handful of people don’t actually own their system. In this case, the leasing company gets to claim the credit. By contrast, installing a new system means a 30% reduction in the cost of the system for your wallet.
At National Solar Project, we’re solar people, not tax people. We recognize a great deal when we see one, but to cash in (literally) on the benefits, contact a tax professional.
What Does This Mean For Me?
Let’s be honest. When has anyone ever complained about fewer taxes? If you’ve considered solar before (or even if you haven’t), the time to act is now. In addition to the generous federal deduction, many states also offer rebates and deductions based on the cost of the system. Check out a state-by-state guide to learn if you live in a location with other benefits.
In addition to the great savings attached to the switch, running a home from solar power has numerous benefits:
- Reduce or eliminate electric bills
- Gain immunity from rising energy costs
- Add value to your property
- Reduce carbon footprint
- Earn a fantastic return on your investment
- Protect the environment
This tax credit won’t last forever. Set to expire in December 2019, it’d be wise to act quickly. After that, the dollar-by-dollar tax reduction will decrease incrementally until 2022 where it will plateau to a 10% deduction for the cost of a solar system. If you see sun-powered energy in your future, 2018 is logically the best time. Contact the National Solar Project to get connected with the best solar company for you.