Did you know some of your neighbors will be getting thousands more back on their tax returns this year?
If your neighbors are one of the thousands who have made the switch to clean, renewable energy with solar at home, they’re probably saving on solar with the Solar Investment Tax Credit.
Before you get annoyed, they’re not taking money from you. The tax credit simply lets them get more of their money back!
Want to find out how going solar can not only help you save every month, but can help you get more of the taxes you paid into the system back? Keep reading.
Save on Solar with the Solar ITC
The Solar Investment Tax Credit is a federal incentive to encourage homeowners to invest in renewable energy at home. Like other tax credits, it reduces the amount of taxes you owe, which often results in a larger return for you!
How? If the amount of taxes you’ve already paid for the year cover your tax liability (the amount of taxes you owe based on how much you make), when you claim a credit that reduces that tax liability, and increases the amount of money you receive as your tax return for that year’s filing.
In short, the Solar ITC can help drop you into a lower tax bracket so you owe less taxes during the year you install your taxes.
The Federal Solar Investment Tax Credit is specifically for homeowners who have installed solar on their primary or secondary residences.
Worried you don’t have enough tax liability to claim the credit this year? You can carry the credit over to next year as well, so you could plan your tax payments to ensure that you can claim the credit.
So long as you install solar is up and working before the end of the given tax year, is a new system, and is financed or owned outright, you should be able to claim the credit.
Why Go Solar Now?
If you can claim the tax credit whenever, there’s no rush to go solar, right?
Not quite. The Solar Investment Tax Credit is scheduled to expire on December 31st, 2023. As it gets closer to the credit expiring, the credit also drops from 26% back, to 24% back.
That doesn’t sound like much, but consider that on a project that costs $30,000 in total, by waiting until 2023 you lose an extra $600 you could have received back.
Beyond the tax credit expiring, there’s always the ongoing wars over net metering across the country. In California and Florida, power companies are lobbying hard to stop the net metering incentive. Net metering helps homeowners afford solar without payings tens of thousands of dollars up front.
Even in states like Montana and Iowa, utility companies continue to propose rate hikes and excessive caps on net metering. But for customers who already have solar, often those changes would require some sort of grandfather clause.
That means if you go solar now, even if your power company wins their fight against net metering and affordable home solar, you’ll have better access to net metering savings based on your original agreement.
Going Solar with Your Local Professionals
If you’re ready to go solar, it’s important to do your research. No matter how much of a tax credit you can claim, if your solar isn’t designed with your home and energy needs in mind, you could lose money instead of save.
What are some things to look for when choosing a solar installer?
Look for solar installers who are local, rather than giant companies working with a random assortment of contractors. It’s important to have a partner in your solar installer, and if they don’t understand your local climate and weather, or know what incentives and regulations exist for your state specifically, you’re not going to get that.
A company that invests in being part of your local community, with local solar professionals who live and work where you do, is key to having a good experience during your switch to solar.
Second, watch out for aggressive sales tactics. If a company is selling through door-to-door solicitation, pushing homeowners to sign agreements before they’ve shown you a design and let you have time to make sure the decision works for you, that’s a red flag.
The solar company you choose to invest in renewable energy with, should have your interests at the heart of their work. If they’re being pushy, it’s always a good idea to ask for some time to consider, and look into another option.
For more tips, we have a whole blog looking at how to choose your solar energy installation partner.
Save on Solar
Ready to go solar and save 26% on your total installation costs with the Solar Investment Tax Credit?
Purelight Power is your local solar installation company across Oregon, Montana, and Iowa. We can help you go solar for $0 down and nothing out of pocket!
Find out if your roof qualifies in under 60 seconds.