One of the greatest aspects of going solar – are some of the tax breaks and incentives that are made available to you by the government. So, not only are you saving money each month on your power bill – but you’re also saving money on taxes, and have access to other incentives to save cash.
For instance, there is a 30-percent federal investment tax credit (ITC) for solar energy systems in place currently. Both residential and commercial customers can take advantage of this tax credit, and it applies to all three major types of solar technology; photovoltaic, solar heating & cooling, and concentrating solar technology.
In addition to the federal tax incentives, there are a variety of state and local incentives as well that in some cases, can make solar practically free. Here’s a few facts about these government incentive programs and how it can assist you, especially as we prep for tax season.
What is the federal solar tax credit?
The federal investment tax credit for solar, will allow you to deduct 30% of your installation costs from your federal taxes. The ITC can apply to both residential and commercial set-ups. This could mean a huge cost-saving if you adopt solar.
What does the ITC mean for solar energy?
The ITC was established in 2005, and was actually set to expire in 2007. However, a series of extensions led the expiration date to go towards 2016. However, thanks to the spending bill that Congress enacted in December of 2015, the credit is available in some form through 2021.
2016 – 2019: The tax credit will remain at 30% of the cost of the system. Therefore, in 2017, you can still get a major discounted price for your solar panel system.
2020: Solar users can deduct 26% of the cost of the system from their taxes.
2021: Solar users are able to deduct 22% of the cost of the system from their taxes.
State and Local Incentives
There’s many local and state based incentives and rebates that can assist you in your journey into solar.
There are four types of incentives at the local level: rebates, loans, SRECs and tax credits. All of these are going to vary depending on your state or region.
For instance, New York offers rebates such as the Megawatt Block Grant program that currently gives a $0.40/watt rebate for people living in ConEd territory or upstate NY.
For loans, Massachusetts has the MA Solar Loan program which has subsidized interest rates and offers a principal buy down of 20-30% for people who make under 120% of the state’s median income. Solar Renewable Energy Certificates (SRECs) are available in many states including MA and NJ, and they offer a rebate from utility companies based on how much renewable energy your system produces. State tax credits are available in many states (including MA and NY) and offer a credit based on a percentage of the system cost.
These are just a few examples. No matter your state – there’s likely some great incentives for you – and it is PowerScout’s goal to assist you in identifying and working with you to find the best incentives in your area. Enter your address and check out how much you can benefit from these government programs, by getting your FREE solar savings report customized for your home.
Also published on Medium.