A Complete Guide to Federal Solar Energy Tax Breaks

Solar Tax Credit

Solar Energy Tax Credit

One of the big reasons that many people make the switch to solar energy is the availability of tax credits and incentives. If you have decided to make the switch for this reason, you want to be sure that you take advantage of every option available. We put together a quick guide to help you to do just that.

1. Federal Programs

The federal residential solar energy credit is the largest and most recognized program for solar panel rebates. This Federal program allows homeowners to claim up to 30% of the cost of their solar panel installation on their federal taxes during the year they had their solar panels installed. The 30% tax credit is available for any solar panel systems installed between 2022 and 2032. Solar panel systems installed in 2033 yield a 26% tax credit, and systems installed in 2034 receive a 22% tax credit.

There is no maximum amount that homeowners can claim on the federal residential solar energy credit, but the homeowner must have proof of their expenses.

You May Read: A Quick Guide to Understanding OASDI Tax!

Homeowners may only claim the federal residential solar energy credit once – when they have the system installed for the first time. If the homeowner moves and takes their solar power system with them and installs the same solar panel system on their new home, they are not eligible for the credit for a second time.

2. State Programs

Many states offer their own credit and incentive programs to residents who install solar power systems, although not all states do. The solar incentives states offer are also non-uniform, meaning that one state may offer a much larger incentive to go solar than another.

States that do not currently offer solar tax credits include Alabama, Alaska, Mississippi, and Wyoming.

Of the remaining states that offer solar power incentives to residents, ten stand out for having the most significant incentives to customers who choose solar. These states include: New York, Rhode Island, Iowa, Connecticut, Maryland, New Mexico, Colorado, Massachusetts, New Hampshire, and New Jersey.

New York is particularly interesting regarding their solar rebates, as residents can take advantage of a cash rebate program. Under the NY-Sun Megawatt Block incentive, NY residents receive a dollar-per-watt cash rebate.

Applying For Solar Energy Tax Breaks!

Before installing your solar power system, determine which tax breaks and incentives you want to take advantage of. Thoroughly research each one to find out how to qualify and to ensure that you follow any regulations, installation instructions, and application instructions to a tee.

You May Read: What is the Inheritance Tax Threshold?

Also, be sure to keep a record of the programs you apply for and what and when they pay you. This information is especially crucial for some  state programs that cap your incentives after so many months or years.

Conclusion

By taking advantage of all of the tax credits, rebates and incentives available to you, installing a solar power system does not have to break the bank. Just be sure that you pay attention to the small print of each option to be sure that you do things by the book or you risk ineligibility.

About Sashi 373 Articles
Sashi Singh is content contributor and editor at IP. She has an amazing experience in content marketing from last many years. Read her contribution and leave comment.

Be the first to comment

Leave a Reply

Your email address will not be published.


*