The most important solar incentive available today is the federal solar tax credit, now known as the Clean Energy Credit. The tax credit covers 30% of the cost of installing solar panels, saving you thousands of dollars in taxes.

It can even completely eliminate what you owe in some cases!

• Most Americans are eligible for the solar tax credit, but there are some important details to understand about how it works, what qualifies, and who can benefit from it before making the switch to solar.
• Solar systems installed before 2033 are eligible for a 30% tax credit on their installation costs.
• A $20,000 solar system would qualify for a $6,000 tax credit against what you owe in federal income taxes.
• Solar systems installed in 2033 will be eligible for a 26% tax credit, while systems installed in 2034 will be eligible for a 22% tax credit before the tax credit completely expires in 2035.
• You must own the solar panels, have taxable income, and have them installed at your primary or secondary residence to qualify for the tax credit.
• When powered entirely by solar, battery storage systems are eligible for a 30% federal tax credit.
  Starting in 2023, standalone battery installations will be eligible for the credit as well.

What is the federal solar tax credit?

Before we get into the specifics of the solar tax credit, let’s go over the fundamentals of how a tax credit works. If you owe $3,000 in federal taxes but are eligible for a $1,000 tax credit, your tax liability is reduced to $2,000. It’s pretty simple. This is how the solar tax credit works. The amount of the tax credit you receive is determined by a percentage of the “qualifying costs” of installing solar panels. The solar tax credit is worth 30% of the installation costs in 2022.  So, if your solar installation costs $20,000, you will be eligible for a $6,000 income tax credit.

Now is the best time to claim the solar tax credit.

You have about ten years to claim the full 30% tax credit. But just because you have the ability to wait ten years does not mean you should. Investing sooner rather than later is almost always a good idea. Installing solar as soon as possible allows you to begin saving money sooner, allowing you to stop paying high electricity bills and start putting your money towards things that are truly important to you.

Not to mention that going solar has never been a better investment than it is now.

Other solar incentives across the country may expire before the federal tax credit does. Consider net metering, which pays you the full price of electricity for the solar energy you send to the grid. Utilities across the country are abandoning net metering and charging solar customers less for solar electricity.

To ensure that you get the best solar savings possible, you’ll want to install solar before things like net metering and utility rebates start to disappear. Use our solar panel savings calculator to find out what kind of incentives are available in your area and start saving money on your electricity bills.

Have questions?   Contact Les Madson @720-351-2372

solar-proud.com/les    lesmadson@gmail.com

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