Solar panels are a great investment not only for residential purposes but for commercial as well. Did you know solar panels can save you a significant amount of money? Yes, they do! Solar systems help to save a lot of money in the long term. Additionally, there are several rebates and tax credits that benefit homeowners and businesses as well, in order to take the plunge and decide to invest in renewable energy sources. The government established benefits at the federal, state and local level that will save and earn you money back for installing a qualified solar system.
Federal Solar Tax Credit
When you install solar panels, you are automatically able to earn the federal tax credit. This means that you will get a credit for your income taxes which will lower your tax bill.
The federal government established the solar investment tax credit (ITC) in 2006. Since then, the US solar industry started to grow by more than 10,000% with an average growth rate of 50% per year during the last 10 years. Due to this, the industry has created hundreds of jobs and supported the US economy through billions of dollars invested.
How to qualify for the ITC?
In order to qualify for the ITC, you must buy the solar panels in the year you want to apply. This means that if you buy the solar panels today, you can request and apply for the ITC for this year.
The other requirement is to generate electricity for a home in the United States. Which is really simple to achieve since the solar panels’ useful life is up to 25 years (or even more).
Government Expectations this year
In 2021, the US government is expecting to provide a 26% tax credit for systems installed between 2020 and 2022. For solar systems installed in 2023, it will provide 22% of tax credit. Isn’t it a great difference? So if you’re considering installing solar panels, think of the 22% or 26% discount you could receive!
Source: Forbes Advisor