Solar energy is widely advocated by the federal government. As one of the most effective tools against climate change, the federal government—as well as some state and local governments—offer tax credits for homeowners who install solar in their homes. The Investment Tax Credit (ITC) is equal to 30% of the total cost of your solar installation—minus any rebates. The solar tax credit was increased by legislation called The Inflation Reduction Act on August 16th of 2022, which increased the solar tax credit from 26% to 30% and also extended it until 2032. Big win for solar! Learn more by visiting: https://www.irs.gov/
Fun Fact: Some states, like Florida and Arizona, also exempt solar installations from sales tax and increased property taxes due to the added value of your solar system.
Every homeowner has access to solar energy. Even if you don’t have the money to pay the upfront costs there are multiple 100% financing options available with no money out of pocket.
Each financing option offers different levels of savings and value with solar loans being a superior option in most cases however, solar leases are becoming increasingly more popular due to the volatile interest rate fluctuations subject to the federal reserve when financing your solar system .
Fun Fact: Some states offer government-subsidized low-interest loans for solar energy!
Solar installations are so affordable because of all the tax credits, rebates, and incentives offered by federal, state, and local governments. The Investment Tax Credit (ITC)—offered by the federal government—is worth 30% of your total solar installation cost.
Note that these tax credits, incentives, and rebates all go to the owner. So you may not qualify for them if you lease your solar system.
Fun Fact: Some utility companies, not just governments, also offer rebates and incentives for homeowners who install solar!
Savings will vary depending on a number of factors: like panel efficiency, climate, and the cost of electricity in your area.
Solar loans are the most cost-effective method of financing a solar installation – often saving customers 40%-70% on electric bills over the system’s lifetime. Solar leases can save homeowners anywhere from 80% to even 100% off their electric bills depending on roof space, eligibility and if the local utility charges a connection fee (Typical Fees Range From $10 to $25). Consult your solar advisor to check your home’s eligibility and energy offset amount.
Fun Fact: Solar Installations, on average, will pay for themselves within 8 years!
People tend to think of solar as an investment opportunity to lower their electric bills. But Solar is an excellent investment option to increase the value of your home too. Solar installations are valuable commodities with long lifespans.
Most solar installations come with warranties that will transfer with home ownership. So your solar installation won’t lose any value if you decide to sell your home.
Fun Fact: Solar installations, on average, increase the value of your home by 4%!
As federal, state, and local governments push more and more for clean, renewable energy, utility companies are building new renewable energy power plants and raising their customer’s electric rates to cover the costs.
Solar power protects you against this inflation. With a solar installation, you’ll determine your own electric rates, which are cheaper than your current electric rates!
Fun Fact: Electric rates have increased about 15% in the past 10 years. Solar power
protects you against utility inflation!
Always use professional, licensed, and insured contractors when undertaking any home remodeling project. You’ll protect yourself from any damage they may cause to your home, as well as protect you against any accidents that may happen on your property.
Local installers tend to have lower rates than national installers and usually focus more on customer satisfaction. Don’t be afraid to go local.
Fun Fact: Many solar brands work with certified, local installers, which ensures a quality installation from installers that work directly with solar panel companies!
Solar power is quickly becoming the preferred energy source for eco-conscious homeowners worried about their carbon footprint and want to do more to combat climate change. Luckily, solar power is also quickly becoming one of the most affordable energy options too.
One of the major reasons for the increased affordability is the Solar Tax Credit. As governments look for ways to combat climate change, promoting clean, renewable energy is an increasingly common approach. Besides researching and developing the technology themselves, governments are also empowering citizens with the opportunity to do their part.
With the Investment Tax Credit (ITC), rather than the government just building new power plants, homeowners can become the energy producers themselves.
Not only is this an extremely effective tool for combating climate change, but it’s also a great way for homeowners to lower their utility bills.
Enacted in 2006, the ITC is a government initiative designed to grow the solar industry and has been a resounding success with over a 10,000% growth in the industry.
The program works by providing homeowners with a federal tax credit worth 30% of the total cost of the solar installation (after any rebates). Note that it’s a tax credit and not a rebate, thus you’ll receive a dollar-for-dollar reduction in your tax liability.
But before you file for the ITC, there’s an important caveat you should be aware of: You must own or finance the solar system to qualify. This can be good or bad depending on one’s specific tax situation. Leasing offers lower monthly payments than financing so for those who cannot claim the tax credit leasing is a great alternative, making both options cheaper than paying your local utility.
With a solar loan, however, you’re entitled to the ITC because you own the system.
Certain state and local governments also offer additional tax credits and benefits. Florida, for example, offers both a sales tax exemption as well as a property tax exemption to make solar power an even more attractive proposition.
State and local tax credits can vary, but with federal tax credits, namely the ITC, you simply fill out Form 5695 for Residential Energy Credits when filing your taxes.
Don’t worry if you didn’t earn enough in the same year of your solar installation to use the entire tax credit. Even if you can’t use all of the 30% tax credit in a single year, you can simply use the remaining tax credit in subsequent years.
While solar technology is changing rapidly, if you want the most cost-effective solar system, you should take advantage of the ITC and start building your solar system today. Currently, in 2023, homeowners can qualify for a 30% tax credit.
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