What is the Federal Solar Tax Credit?
The tax credit covers 30% of the entire cost of your solar system – from equipment and permitting costs through installation. You claim the costs on your federal taxes and you’ll owe that much less on your taxes the next year.
As long as you own your solar system and pay taxes, you can claim the credit. What if you don’t owe enough taxes to use the entire credit? Businesses can carry the credit up to 20 years after install until the entire 30% is used and can also recoup taxes paid in the prior year. Homeowners can carry the credit forward for up to five years.
When Does the Solar Tax Credit End?
Solar installations that start in 2019 or take advantage of the safe harbor provision can take full advantage of the 30% Federal Solar Tax Credit. But after that, the amount of money you can save reduces year by year. In 2020, the credit steps back to 26% of the project’s cost. Learn more about the tax credit here.
Dr. Philip Palmer invested in solar energy for two reasons:
The money he immediately saved from the 30% federal tax credit
The long-term savings from his reduced electricity costs
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