It is easy to see the long-term benefits of renewable energy here in the United States — especially the financial benefits with so many incentives in place. In order to incentivize homeowners to reduce their carbon emissions and their reliance on fossil fuels, the Federal Investment Tax Credit (ITC), or solar tax credit, provides big tax savings for home and business owners who install solar electric systems on their properties. And good news - the solar tax credit was extended at the end of 2020. Here’s how you can take advantage of these federally offered solar savings come tax season!
HOW THE SOLAR TAX CREDIT WORKS
After GPS Solar has installed your residential or commercial solar panels and accompanying inverters in 2021, you can take 26% of the total cost of installation and subtract that from what you owe the Federal Government on April 15. If you spend $30,000 on your installation, you can subtract $7,800 from your federal tax liability.
And if you owe less than that $7,800? Fortunately, you can rollover the remaining unused deduction over to the next year. This ensures that you don’t lose out on a single cent of your federal solar incentive!
But you’ve got to act quickly as the solar tax credit is starting to step down in value. In 2021, the solar tax credit equals 26%. Following the tax credit extension, the percentage will drop further as follows:
Solar projects beginning in:
*after the year 2024, the solar tax credit deduction for commercial solar installations drops to 10% permanently but the tax credit for homeowners is eliminated.
If you live in Texas, we'll make sure you receive the most lucrative rebates and incentives on offer, from manufacturer rebates to local energy utility rebates. We will even help you file all the paperwork! Trusting a local contractor makes all the difference when it comes to getting the most out of your solar installation and saving energy in the long run.
If you have any questions about how to best use the solar financial incentives offered for your home use in TEXAS, GREEN PLANET SOLAR (GPS) has a solar energy expert waiting to answer your questions.