For homeowners, choosing renewable energy means doing a great deal of research, comparative analysis, and investigation on companies and equipment. The federal solar tax credit, also known as the investment tax credit (ITC), allows you to deduct 26 percent of the cost of installing a solar energy system from your federal taxes. The ITC applies to both residential solar and commercial solar systems, and there is no cap on its value.
Utilizing the ITC for Your Solar System
With the new year here, it’s important to understand how your potential savings of 26% can help you save. The system must be installed in order to receive the tax credit and solar installation times vary from state to state due to solar permitting, solar installation companies, and customer demand. In 2020, the average-sized solar installation costs usually range from $11,144 to $14,696 after solar tax credits. The average price per watt for solar panels being $2.51 to $3.31. In California, solar is used for many residential homes so installation times are considerably less than other states. But initiating the solar installation process is very important now, in order to qualify for the tax credit.
***Please note that this is for informational purposes only. We can not offer tax advice and all information concerning tax credits should be confirmed with your tax advisor.***
Choosing Local, Affordable Solar
When Congress approved the 2016 federal spending bill and extended the solar panel tax credit, it provided millions of Americans the opportunity to save with affordable solar. Now, it’s easier than ever to compare system designs, installation companies, and financing options using research tools online. It is important to research the installation companies and equipment you are considering to use. Also consider local tax credits, rebates from electric companies, and financing options. The residential and commercial tax credit (ITC) deadlines are as follows:
- 26% Tax Credit, has been extended to 2025.
*Safe Harbor qualifications and dates may shift due to COVID-19.
Why Act Now?
The majority of homeowners and business owners do benefit from the Federal Solar Tax Credit. But it’s up to your tax advisor to give you the specific numbers and savings. The important step now is to schedule a solar consultation in order to see if you qualify and how long the process will take. Solar Permitting takes up a majority of the time in most cases, and the installation itself is typically only 1-3 days. But the entire process could be upwards of 6 months in some cases, due to slow permitting, conflicts with the system, and lack of resources. Look for a solar installer that can help speed up the process for you so you receive the maximum benefits!
The professionals at Sun Peak Solar Services in Bakersfield, CA take pride in their workmanship and aim to offer the most affordable prices to their valued clients. Local solar companies such as Sun Peak Solar want homeowners to value energy independence, lower electric bills, increased home equity, and cleaner energy.