Solar Incentives and Rebates
Reach your Full Solar Potential
Solar technology has become more affordable in recent years, making it more accessible than ever for homeowners and business owners to install solar panels on their properties. But even as the costs come down, the initial expenses can still be a significant investment, and some people have a hard time fitting the expenses into their budgets. The good news is that you can maximize your financial benefits by taking advantage of solar incentives offered through federal tax credit programs and on a state-by-state basis.
How do Solar Panel Incentives work?
Solar panel incentives are designed to offset the financial burden of installing a solar energy system. But keep in mind that these incentives don’t come in the direct form of cash in your pocket. Instead, there are incentive programs that reduce the amount of money you’ll need to pay in federal taxes.
For example, if you qualify for a 30% tax credit through a federal tax credit program and your solar installation costs come in at $15,000, then it means that you could qualify for a $4,500 federal tax credit. When you file your taxes for the year that the solar panels were installed, then you will need to submit the applicable tax forms to claim the available tax credits.
Keep in mind that this is not a typical tax deduction. A deduction lowers your taxable income. In comparison, this federal tax credit applies to the total amount you owe in taxes the year you installed solar panels. If the tax credit exceeds the amount that you owe in taxes that year, then you will have an unused credit that is forwarded to future years
Solar Incentives in Your Area
Types of Incentives & Programs
As you are looking for options to reduce the financial burden when installing solar panels, it’s helpful to talk to an experienced solar panel installation team for personalized recommendations. Not only can you take advantage of the federal tax credits, but there is also a possibility that you can leverage state-based incentives as well.
The solar tax incentives can cover a wide range of costs associated with installing a solar energy system, including:
- The cost of solar panel equipment
- Any hardware needed for the installation
- Labor costs for assembly and installation
- Electrical services to connect the solar panels
- “Soft costs,” such as permits, fees, etc.
Keep receipts for all related costs to install the solar panels so that you can maximize the available rebates.
Federal vs State Solar Incentives
Nationwide, homeowners in every state can benefit from the federal tax credit program known as the “Inflation Reduction Act.” This credit covers up to 30% of all clean energy improvements you are making in your home. The current act is in place until 2033.
Not only does this federal tax credit program cover solar panel installation, but it can also include other energy-efficient home improvement projects such as geothermal heat pumps, water heaters, battery storage technology, fuel cells, and more.
In addition to using the federal tax credit program, also check for solar panel incentives by state. You can search for information online about tax incentives in your local area. Another option is to talk with a local solar panel installation team because they will be up-to-date with all of the incentives offered in your location.
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