In December of 2015, solar panel companies and homeowners were brought together through what was named the 2016 Federal Spending Bill–a solar panel tax credit. This bill came with a five-year solar tax credit extension and, as a result, solar panels are affordable for more homeowners than ever before.
Your first question should be pretty obvious: how does this impact you? This article is intended to help homeowners learn about how the Federal ITC makes solar energy affordable for virtually every household, and why now is the time to contact a solar panel company that can set you on the road to saving money and enhancing your family’s lifestyle.
What is the Solar Panel Tax Credit All About?
Also known as the Incentive Tax Credit or Federal Solar Tax Credit, it permits homeowners to deduct 30 percent of the cost of installing solar panels from one’s federal taxes. There is no cap on the solar panel tax credit’s value, and it even extends from homeowners to commercial properties. According to EnergySage Solar Marketplace, consumers will save more than $5000 when they make the switch to solar power in 2019. Now is the time to call solar panel companies and ask for a quote with the ITC added to the final sticker price.
How do I Know if I Qualify for the Solar Panel Tax Credit?
All you need to do to qualify for the solar panel tax credit is to own your home and your solar system. And enjoy the peace of mind knowing that even if you lack tax liability to claim the entire credit in a single year, the remaining credits can “roll over” into the next year so long as the tax credit is still in effect. This means you can’t sign a PPA with a solar panel company or lease the system–you need to own it in order to enjoy the savings.
How to Claim the Solar Panel Tax Credit
Claiming your solar panel tax credit is done when you file your yearly federal tax return. Just let your accountant know that you have invested in solar panels for the home (or business) in the past year. If you file your own taxes, Google search “EnergySage step-by-step guide on claiming the solar ITC” and follow the instructions. You can also ask your solar panel company to assist you in this process.
Where can I learn More About the ITC Solar Panel Tax Credit Legislature?
You can find the official bill online, and will want to pay attention to Section 303 which starts on page 2005. It details the outline of the extension. In addition, Greentech Media performed an in-depth analysis of the solar panel tax credit and its impact on the industry. Finally, search online for an article by The Wall Street Journal that delves into the legislation and how it impacts homebuyers. It is also wise to have a sitdown chat with your solar panel company and ask them to go over the details of the ITC with you, how it will impact your total cost, and how solar panels will help you hit your savings and lifestyle goals.
