What You Need to Know About the Solar Tax Credit
Who Can Benefit From Solar Tax Credit?
The Solar Tax Credit, or the Federal Investment Tax Credit, is a federal tax credit available to homeowners, businesses, and home builders who make qualifying energy efficiency upgrades to homes, businesses, or building projects.
The tax credit allows for 26% of the total install price of qualifying energy efficiency upgrades to be written off until December 31, 2022, and then drops off to 22% in 2023. In 2024 there will only be a 10% commercial tax credit available.
If you cant utilize the entire credit, you can roll over the remaining portion to the next tax season.
Why is the Solar Tax Credit Important?
Solar prices have dropped over 80% in the past ten years.
Even with the drastic drop in solar prices, solar is still an investment.
The Solar Tax Credit makes solar even more affordable and attainable to consumers.
Solar panels also add value to properties. Properties with solar sell for more and are sold faster.
The Solar Tax Credit gives consumers a higher ROI (return on investment) on their solar system investment.
Who Can’t Benefit from the Solar Tax Credit?
If you are tax exempt you won’t be able to utilize the Solar Tax Credit.
That doesn’t mean you can’t benefit from solar. Most people save money with solar even before factoring in the Solar Tax Credit. Solar Leases and PPAs are viable options for people who don’t qualify for the Solar Tax Credit.
Time is Ticking..
There is a timeline for you to be able to maximize your solar savings. You will only be able to write off the full 26% until Dec. 31, 2022. If you are interested in solar and want the best price the time to make the investment is now. Some states and local governments also have incentives for solar. You can look those up by using the Database of State Incentives for Renewables & Efficiency or DSIRE.
If you would like to know how you can utilize the Solar Tax Credit, Hirst Solar Consulting has solar solutions for residential and commercial projects. We’ll build you a custom solar design based on your energy usage and offset goals. Not sure what you want or need? Don’t worry we can help you figure that out.
If you would like a more in-depth explanation of the tax credit and how it applies to your specific tax situation, we recommend you speak with a CPA.