What is the solar tax credit?

The federal investment tax credit (ITC) allows homeowners to deduct 30 percent of the cost of solar panel installation from their federal taxes. Homeowners have until 2019 to claim the full 30%  benefit of the federal ITC. After that, the savings will decrease every year until they disappear completely. By 2022, Homeowners that install solar panels cannot claim any deductions on their taxes. The federal ITC does not apply to homeowners that lease their solar panels or people that rent their homes. Let’s say your home requires a system that costs roughly $25,000. That means you’ll receive a $7,500 deduction on your federal taxes. If you don’t owe as much in taxes at the end of the year as 30% of the cost of your system and can’t claim the $7,500 tax credit in one year, then you can roll-over any remaining credits into future years to ensure you get the full tax deduction.

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*The 10% tax credit in 2022 is only available for commercial solar energy systems, not residential

The government is offering this 30% tax credit on solar until 2020. After that, this incentive will decrease to 26% in 2020, 22% in 2021, and in 2022, it will disappear completely for residential systems. It is important for this reason to get these huge savings from the government on your taxes before they go away. Think about this tax credit as a 30% off coupon toward the cost of your solar system. In 2020, you can only get 26% off and the coupon only shrinks from there. So it is in your wallet’s best interest to go solar as soon as possible for this reason to get the biggest bang for your buck.

Solar is a smart investment to make now not only for your monthly bill, but for your taxes as well. These monthly savings are there from the start and will only increase with time. Get a free solar quote from Skyline today! You (and your wallet) will thank us later.

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