As 2020 continues to pave the way for solar energy, there is a forecast out for those making the transition. California is making strides above the other 49 states in terms of solar energy and how it is implementing it into state law. California’s residents can rest assured; there is a benefit for complying with state regulations and choosing the solar panel system as your preferred renewable energy source.
Federal Solar Tax Credits
Residents in California and other states who are pursuing solar energy as a primary source of energy are entitled to use federal solar tax credits when they file their income taxes. The ITC, Solar Investment Tax Credit offers residents a financial credit for taking the step to move into renewable energy and pursue solar energy. This is not a return on tax refunds but reduces the amount of taxes that you will owe when you file in the upcoming tax year.
In the year 2020, if you began your construction during the current calendar year, the credit is equal to 26 percent of the cost of your solar equipment. You will need to verify your purchases and construction, but this percentage is substantial for those who will owe taxes after the year.
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Obtaining This Tax Credit
When you file your taxes after the year is over, you will need to submit the 5695 IRS form in addition to your 1040 form. This form outlines the system that you have purchased, the cost of the system, and provides the verification that the IRS needs to award you the tax credit.
California Solar Mandate
As of January 1, 2020, all new construction homes must have solar power systems installed per the California Solar Mandate. This mandate means any new construction in California this year that is under three stories, and a single or multi-family home is powering their home with solar power as the primary source. The panel system differs in size for each construction because it needs to be large enough to handle the annual power usage.
Who is responsible for this mandate?
This mandate was voted in by the California state government and their representatives in response to the residents and the California Solar Initiative, who is striving to meet energy efficiency at every level in an attempt to protect the environment and reduce power costs for residents. This mandate is just the most recent achievement made by California in their quest to be as energy-efficient as possible.
A Handful of Exceptions to the Mandate
Some homes under construction in the state of California are not large enough to warrant the current solar panel system. Depending on the square footage of the house, these residents may be exempt from the requirement. They are, however, still encouraged to pursue this power source and continue forward with a solar panel system.
Contact the Experts at Solar Optimum
If you have not already made the transition to solar energy but would like more information, contact Solar Optimum today. Whether you just have a few questions or are ready to take the next step, we are happy to help! Our Energy Coordinators are standing by!
And don’t forget to download this FREE Guide to learn more about the solar lifestyle and all the benefits it can bring to your home!
