The Investment Tax Credit (ITC) is worth 26 percent of the system cost in 2021 and may be deducted from your federal income tax. The tax credit is set to expire in 2024 for residential installations. It is available to those who buy their system (cash or loan), not to those who lease. It may be rolled forward if you do not have enough tax liability in the installation year to use it in its entirety.

When you install solar water heating, the value of your home increases. Homeowners in Florida enjoy a property tax exemption that allows them to pay property taxes at the rate they paid before the installation. The value of their home will not be reassessed. For residential properties, the exemption is 100% of the increased value. It is 80% for nonresidential installations.

In Florida, there is no sales tax on the purchase and installation of a solar energy system. This means up to 7% savings.

Having a solar water heating system on your property is known as a capital improvement, which adds to your property’s value. This means that you can potentially sell your home faster and for more than homes without solar. Your investment in efficient, clean solar power also adds to the tax basis of your home. If you sell the home, this tax-basis investment can be deducted from the sales price, reducing the amount of the price counted as this reduces the taxes taken from the sale and may be able to help you avoid capital gains taxes on appreciation.