At Simply Solar, we’re proud to help people all over the San Francisco Bay Area achieve clean, green energy independence by switching to residential rooftop solar panels or a commercial solar system. Solar panels are a great investment because they not only cover their own costs, but generate significant return on investment over the lifetime of the system – but to make the deal even sweeter, the federal government offers a tax credit to help offset the costs of solar panel installation. Here’s how it all works.
How the Solar Tax Credit Works for 2020 and Beyond
The incentive, called the Residential Renewable Energy Tax Credit, offers a tax break equal to a portion of the total cost of your solar system. In 2020, the credit covers 26% of the purchase and installation costs of your system. That number will decrease to 22% of the costs in 2021, and unfortunately, the credit will expire for individuals after the end of 2021. However, people who own a home-based business are still eligible for a 10% business tax credit for systems installed in 2022 and beyond, even though the individual tax credit will expire.
So what does the tax credit cover? Essentially, it applies to the entire bill for a qualified solar system, less sales tax. This includes your solar panels, all auxiliary parts, and all of the labor costs required to design and install your solar system. So long as it’s a functional solar system that produces energy or heats water that you’re installing on a house that you live in, you should be eligible for the credit.
Schedule Your Solar Savings Assessment
The individual solar installation tax credit is valid through the end of 2021, but it will expire after that – so if you want to take advantage of it, it’s best to act fast. At Simply Solar, we’ve helped countless homeowners switch to a solar roof and save thousands doing it in the long run. Ready to see how solar can help you? Take the first step and request your free solar savings assessment online today. We can’t wait to hear from you!