Going solar is a significant investment, but it is also one of the smartest investments you can make as a homeowner. If you are researching how to go solar, you have most likely read about the different state and federal solar tax credits available to homeowners.
You can reduce the upfront costs of going solar by taking advantage of the many federal, state, and local tax credits available to homeowners.
While there are many different local and state tax credits available to homeowners, the Investment Tax Credit (ITC) also called the federal solar tax credit is available to all homeowners who live in the United States.
The federal solar tax credit is valued at a percentage of what you spend to install your home’s solar PV system. Homeowners can deduct 30% of the cost of installing a solar energy system from their federal taxes. The 30% tax credit will be available until 2033. It will drop down to 26% after 2033.
The average cost for a new solar panel system is $16,000. In that case, a homeowner who installs their home’s system will receive a 30% deduction which amounts to $4,800. That person can then claim a tax credit of $4,800 which reduces their total federal income tax amount by $4,800.
You can roll over your federal solar tax credit to a future year, if your taxes owed in the year you installed your system are less than the credit you earned.
There is no cap on the value of your tax credit, so homeowners in all income brackets are eligible for the federal solar tax credit.
We recommend you check out our Homeowners Guide to the Federal Solar Tax Credit to learn more about your eligibility and how to file for the tax credit.
State and local tax credits work the same way as the federal solar tax credit, but for your state income taxes.
Not every state offers tax credits and the amount of the tax credit will vary by individual state. If you live in a state that offers state tax credits for going solar, this will not reduce the amount of your federal solar tax credit.
If your state provides you with state tax credits, your taxable income on your federal tax returns may be higher, since you have less state income tax to deduct.
The U.S. Department of Energy Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics can help answer questions about your eligibility for the tax credit, expenses you can include, rebates, and other tax incentives.
The Database of State Incentives for Renewables and Efficiency (DSIRE) is a comprehensive database for homeowners to search for and find solar energy incentives in their individual state and across the country.
If you’re considering going solar, you have most likely heard about the federal solar tax credit. The investment tax credit (ITC), which is frequently called the federal solar tax credit, allows you as a homeowner to deduct 30% of the cost of installing your solar system from your federal taxes.
Read ArticleGoing solar is a significant investment, but it is also one of the smartest investments you can make as a homeowner. If you are researching how to go solar, you have most likely read about the different state and federal solar tax credits available to homeowners.
Read ArticleSolar rebates are an easy way to reduce your cost of going solar. Rebates are incentives you receive upfront when you install solar panels for your home. States and utility companies can provide rebates at a fixed flat rate regardless of the size of your system. Other utility rebate programs will depend on the size of your home’s system - the amount of kilowatts (kW) you installed for your home.
Read ArticleAccording to the U.S. Department of Energy, a home’s resale value increases by $15,000 when a solar system is installed. Most states offer solar property tax exemptions as an incentive for homeowners to go solar. Solar Property Tax Exemptions remove the added value of a solar system from the valuation of your home for tax purposes. While the value of your home increases due to installing solar, your state property taxes will be for the pre-solar value of your home which is lower.
Read ArticleYou may have read about or come across the term “net metering” while researching if you should go solar. Net metering allows you to sell surplus energy produced by your home’s solar panels back to your utility company. It is essentially a billing tool that uses the electric grid to store surplus energy generated by your home’s system.
Read ArticleMany homeowners are currently asking themselves “Should I go solar?” The cost of switching to solar has dropped 70% over the past decade while the average utility bill has increased by 15%. The huge drop in price along with the many tax credits, rebates, and other financial incentives available to homeowners has made solar into an attractive option.
Read ArticleOver 1 million homeowners in the United States have made the switch to solar this past decade and that number is expected to reach almost 14 million (1 out of every 7 homes) by the end of this decade. If you’re one of the many homeowners who plan to go solar, we recommend you follow this process to convert your home to a solar power home.
Read ArticleWe recommend that you do research about potential solar installers before you schedule a meeting with them. This will save you a lot of time and ensure that you are speaking with a solar installer who you can trust.
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