A Homeowner’s Guide to the Solar Tax Credit
Solar energy is more popular than ever, with the United States generating 27.2 Gigawatts of solar energy!
But did you know that you can install solar panels onto your home? You’ll even get a tax credit for helping the environment!
To learn more about the solar tax credit and find out if you’re eligible, keep reading!
A Brief History of The Solar Tax Credit
The solar energy tax credit we have now began life in 2005 (though it wasn’t enacted until a year later). At the time, it was known as the Solar Investment Tax Credit, or ITC.
Through the initial bill, residential and commercial properties would receive a 30% credit on their total expenditure. However, the bill came with one huge caveat: only the installation company was eligible for the credit, leaving homeowners out in the dark.
Thanks to lobbying from the Solar Energy Industries Association, the bill continued past its initial expiration date of 2015. It even saw some updates, including the addition of homeowners to the list of eligible recipients.
We’re sorry to say that it isn’t all good news. The taxable investment figure continues now shrinks each year by 4% despite the popularity of renewable energy increasing.
By the initiative’s current expiration date of 2022, that 30% figure will decrease to 22%. While that’s still not an inconsiderable write-off, it is a worrisome trend.
With that said, the SEIA already has plans to extend the bill past 2022, though it isn’t clear if taxable figures will continue to dissipate.
So, to recap, you can still take advantage of the ITC while the government works out the details of the bill’s next iteration. But how do you qualify?
As mentioned above, the tax credit is now offered to homeowners in addition to businesses.
You can take advantage of the credit on more than just your primary residence, too. As noted by the U.S. Department of Energy, vacation homes and rental properties are eligible, as well!
As long as you own the property, homeowners are free to take advantage of the residential solar tax credit. The only catch is that you have to install the solar panels before claiming them on your taxes.
Those who work at home can technically take advantage of the credit twice, but the procedure is complicated enough that we suggest working with a tax professional before making a final decision.
What is Included?
The credit extends to renewable energy equipment such as solar panels. The information from the Department of Energy states that the location of the solar panels doesn’t matter, either, so you’re not limited to roof panels.
It’s important to note that you can also write off the cost of labor. So not only will you save money on the actual equipment, but you can write off the installation, too. This is particularly important if you’re thinking of hiring a company (check https://blueravensolar.com/utah/salt-lake-city/ for more info) to install the panels on your property.
Look on the Bright Side and Pay Less in Taxes
As solar energy continues to grow in popularity, expect to see more people take advantage of the solar tax credit. The sooner you act, the more credit you’ll receive, so start looking into panels today.
And if you’re interested in learning more about renewable energy, make sure to check back with our blog for even more content.