The Federal Solar Investment Tax Credit (ITC) is a tax incentive offered by the United States government to promote solar energy installations. Through this credit, homeowners and businesses can deduct part of their system costs from taxes.
At present, the solar tax credit rate is 26% of the total cost of a system, including installation. This rate will remain in place until 2022 and then decrease to 22% for commercial systems and 0% for residential installations after that.
Installing a solar energy system may be an expensive undertaking, but the potential savings are substantial. The Investment Tax Credit (ITC) can reduce the cost of installation by thousands of dollars, making it more accessible for homeowners and businesses alike. The exact amount saved depends on both the system’s cost and your tax liability as a homeowner or business.
For instance, if a homeowner installs a solar energy system costing $25,000 they are eligible for an income tax credit of $6,500 (26% of $25,000). This would bring the net cost down to $18,500. If they have a tax liability of $6,500 or higher in that year they could claim all of the credit immediately; otherwise, they could carry over any unused portion into future years.
The ITC has been a driving force behind the growth of solar energy in America, making it more accessible for homeowners and businesses while encouraging research into new solar technologies. If you’re thinking about investing in a solar energy system, the ITC can make it more cost-effective while offering significant savings over its lifespan.
This post was written by Daniel Massaad, owner and expert solar technician at Energy Solutions Direct! ESD Solar offers knowledgeable and efficient solar installer Columbus! Our licensed and certified contractors are masters of their craft; with years of experience servicing the great Tampa Bay area and beyond, the choice is simple. ESD excels at offering you the best in solar value!