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Solar Energy Incentives: What You Need to Know

Did you know that the price of solar power has shrunk by approximately 80% since 2010? As a result, it now costs less than coal and nuclear.

That should be enough reason to consider installing solar panels at home. If not, then know that numerous solar energy incentives await you.

Since there are a lot of them, we decided to create this guide rounding up the best ones. So read on, as these programs can help you reap the benefits of solar panels for much less.

Federal Solar Investment Tax Credit

The federal solar ITC is a tax credit you can apply to the income taxes you owe the federal government. It’s a dollar-for-dollar deduction that you can also roll over to the following year.

For example, let’s say you qualify for a $10,000 solar ITC. You can then deduct that amount from the federal income taxes you’d otherwise pay.

However, the solar ITC isn’t forever; it’s phasing down yearly, starting in 2023.

The tax credit rate for installations placed in service before January 01, 2023, is 26%. After that, systems placed in service before January 01, 2024, can qualify for a 22% credit.

Home solar panels installed after that can no longer receive any incentive. However, commercial installations can still qualify for a 10% credit.

So, if you also have a business, ensure you have the best roof for commercial solar installation.

State-Specific Tax Credits

Several states run separate income tax credit programs for solar installations.

One example is New York, offering tax payment deductions of up to 25% or $5,000, whichever is lower. It applies to most solar energy system costs, including equipment and labor. Moreover, you can qualify whether you own or only lease your solar panels.

New Mexico also has a state solar tax credit of 10% or $6,000, whichever is lower. It applies to home, business, and agricultural installations. However, you must purchase and own the solar energy system to qualify for the incentive.

State Tax Exemptions

There are two primary solar-related tax exemptions: property tax and sales tax exemptions. At the moment, 36 states offer the former, including New Jersey and Nevada. On the other hand, the latter is available in 25 states, including Arizona and Colorado.

With a solar property tax exemption, you don’t have to pay for the extra value your solar system adds to your home. That’s despite solar having the potential to increase your property’s value.

With a sales tax exemption, you don’t need to worry about the tax imposed on buying solar equipment. Note that some states offer both forms of tax exemptions, so check yours as you may not have to pay for either.

Solar Rebates from Utility Companies

Utility providers offer solar rebates, too, which are much like cash-back credits. If you meet the program’s criteria, you can expect to receive a certain amount afterward.

For instance, Colorado Springs Utilities offers customers a rebate of $0.10 per watt. If you’re a qualified CSU client, you can cash out your credits at the end of the calendar year. You can then use those credits to reduce your next bill’s due amount.

Go Green With Solar Energy Incentives

As you can see, many solar energy incentives can help you switch to green energy for less. Just remember that most of them, including the federal ITC, have expiration dates. So, keep that in mind, and consider going solar ASAP.

Are you looking for more guides on home, lifestyle, or tech? Then feel free to browse our latest informative blog posts!

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