How to Take Advantage of Solar Tax Incentives
September 10 2020
Many homeowners aren’t aware of the valuable solar tax incentives available to them. Because of this, most people think they can’t afford to switch. The truth is, solar is very affordable. This is partially due to state and government incentives for solar.
It is also due to increased demand. As solar panel installation becomes more and more popular, prices continue to fall. The cost has dropped almost 90% since 2010. So, since prices are trending down, shouldn’t you wait a few more years to buy a solar panel installation?
The answer is no. Right now is the best time to invest. The federal solar tax credit will eventually expire. Take advantage of government incentives for solar before it’s too late.
There are also local and state incentives that can help save you money. Get the scoop on all the solar tax incentives available to you. Plus, learn more about solar tax rebates.
Discover how to use government incentives for solar. Save money on upfront costs with solar tax incentives. Then, save even more. Use Greenlife Solar to find the best deal on a solar photovoltaic installer in your area.
The Federal Solar Tax Credit
The federal solar tax credit, or the investment tax credit (ITC), is the most important incentive available. When this tax credit for solar panels was first created in 2005, it covered 30% of system costs. The ITC was set to expire in 2007 but has been extended several times. This credit has shown success in encouraging nationwide solar panel installation.
Now, the credit has reduced in value. The solar credit 2020 covers 26% of costs. This is still a sizeable discount. If you buy a $15,000 system, you’ll get almost $4,000 off. That’s huge.
To take advantage of solar credit 2020, you’ll need to start solar panel installation by the end of the year. If you wait until next year, you can still use the federal solar tax credit. However, the credit will only cover 22% of your costs.
Once 2022 hits, the ITC will no longer cover residential solar systems. This means homeowners will not have access to a federal tax credit for solar panels. Take advantage of government incentives for solar before they expire. Claim your tax credit for solar panels during your yearly tax return. Get information on how to do that here.
Keep in mind that many solar photovoltaic installers can direct you on filing for this tax incentive.
Solar Renewable Energy Credits
Solar renewable energy credits (SRECs) are another type of incentive. Homeowners earn one SREC for every 1000 kWh their system produces. They can then sell these to their local utility provider for a pre-determined amount. The value of an SREC varies by state but can be worth over $300.
Unlike a tax credit for solar panels, this incentive does not involve filing. Instead, you receive money directly in exchange for a certificate of energy production.
Solar renewable energy credits are part of the renewable portfolio standard. This standard requires utilities to produce a percentage of electricity through renewable resources. The solar renewable energy credits that utility providers buy count towards these percentages.
Not all states offer solar renewable energy credits. Check the renewable portfolio standard policies in your state here.
Solar Tax Rebates
Certain states offer additional savings in the form of solar tax rebates. These work like the federal solar tax credit. The only difference is that you deduct costs from your state tax return, rather than your federal.
In addition to solar tax rebates, cash rebates are sometimes available on a state or local level. Solar photovoltaic installers can help you take advantage of these savings. If you want a general look at solar incentives in your state, check out this map.
Lastly, some utilities offer performance-based incentives (PBIs). These programs pay homeowners a kWh credit for electricity production. PBIs do not work like solar tax rebates in the sense that they do not involve taxes. Instead, they exist in conjunction with net metering policies.
Solar Panel Installation
Solar tax incentives help make going green affordable. These credits and rebates reduce upfront costs. The money you save on electricity over the system’s lifetime will also help cover these costs.
Finding the right installer is the key to 30+ years of successful solar energy production. It will also save you money. Quality solar photovoltaic installers can help you get the best price on your system. The installation company you choose can also help you file for extra savings.
Take advantage of solar credit 2020 and get the lowest price on your residential system. Use federal, state, and local government incentives for solar to save money. Then, use Greenlife Solar to find the best price on a solar installer near you.
Greenlife Solar is a free online service designed to give you a transparent look at all of your options. Compare pricing and information on solar installation companies in your area today.
