Solar energy is a great investment. The federal solar investment tax credit (ITC) makes it even better. But the time to redeem the ITC at its current maximum value is coming to an end, so homeowners should act now.
With the ITC, homeowners get a federal tax credit for a percentage of the cost of their solar system making it more affordable. Throughout 2022, the ITC for residential installations will remain at 26 percent of the amount invested in an eligible solar system, as long as the construction begins before 2023.
But homeowners want to save the most money with the ITC, they should start the process now. Beginning in 2023, the tax credit will “step down” to 22 percent. And in 2024, it will be completely gone for homeowners.
The ITC is beneficial for homeowners because it’s a dollar-for-dollar tax credit applied to federal income taxes. For example, if the solar system costs $20,000, the tax credit would be $5,200. And if the tax bill is not high enough to claim the entire credit in one year, the remaining amount may be rolled over to future years – as long as the tax credit is still in effect.
Solar customers can use the ITC to offset expenses for their solar panels, labor costs and developer fees for their solar energy system. Solar storage units apply as well, as long as they’re charged only by solar panels associated with the storage system.
The type of financing used, may affect the availability of the ITC. This credit applies only to those who purchase their solar system. Homeowners who lease solar equipment or use a solar power purchase agreement generally cannot benefit from the ITC.
The ITC has been a huge driver of solar growth in the U.S — which has expanded by 10,000% since 2006, when the tax credit was first enacted. The solar industry has worked hard to keep the ITC in place and helped secure its extension by Congress in 2020. When the ITC phases out completely for residential customers in 2024, many state and local solar incentives will remain.
Our highly trained sales consultant will be glad to fill you in on the many ways we can help you save money on energy bills while reducing your carbon footprint.
Let us answer all of your questions! Go solar with Mirasol Solar and save now and long into the future. Talk to our sales staff or visit us online for more.