If you are planning to install solar panels on your property, the good news is that it has never been so affordable. Installation costs have fallen by around 70% in the past decade, making it far easier for homeowners to face the upfront costs of switching to solar.
Another key reason why solar panels are so affordable is the federal solar tax credit. Since it was introduced in 2006, it has served to drive public interest in solar energy and reduce our dependence on fossil fuels. In this blog post, we will take a closer look at the federal tax credit for solar panels.
What Is the Federal Tax Credit for Solar Installations?
The federal solar tax credit is a financial incentive for homeowners. It is designed to offset the upfront costs of solar panel installation. Currently, the tax credit stands at 26%, down from its original 30%.
The 26% rate will continue until the end of 2022 and drop to 22% for 2023. It is then due to expire unless the federal government moves to extend it with future legislation.
Given that the tax credit is being gradually phased out, now is the most opportune time to take advantage of it. In addition to the federal tax credit, many states offer their own incentives that further reduce the upfront cost for homeowners.
How Can Homeowners Claim the Credit?
The federal tax credit for solar is not difficult to claim. It is simply necessary to complete form 5695 when you are lodging your tax return. Once the amount that you are eligible for has been calculated, you will be able to enter it on form 1040.
You will be eligible for the tax credit as long as you have tax liability during the year in which you installed your solar panels. It is also necessary to be the owner of the solar panel system that you have installed. This means that if you lease the solar energy system, you will not be eligible to receive the solar tax credit (rather, the installation company would be).
If you are planning to install solar panels on your property and would like to learn more about the federal solar tax credit in South Carolina, contact Blue Raven today.
Make the Most of Solar Incentives
Over the 25-plus year lifespan of solar panels, homeowners stand to save tens of thousands of dollars on their home’s energy bills. What’s more, solar panels are a clean, renewable, and abundant energy resource. This makes them far more advantageous for the environment than coal, oil, and other types of fossil fuels.
The federal solar tax credit helps to make the installation of solar panels cheaper for homeowners. If you are interested in making the switch to solar energy, we recommend that you speak to a licensed and experienced solar installer in your local area.
Like this blog post on the federal tax credit for solar? Be sure to check out our other informative articles on a business and finances.
