U.S. Government Pays Middle Class Families to Go Solar
Thinking about going solar? Right now is the time to switch! Millions of Americans are not aware that they qualify for free solar panels. Homeowners in specific zip codes could get the chance to enjoy a solar-powered home and pay $0 for panels and installation. But how does it work? We are here to explain the basic overview of solar incentives. The economic and environmental benefits of going solar are quickly becoming common knowledge.
Solar energy not only cuts carbon emission of residential and commercial buildings, but it also boosts the economy by reducing the nation’s reliance on the global energy market. After finally recognizing these advantages, the U.S. government has set financial incentives to make solar more accessible. Tax breaks alone can lower the cost of a solar panel system from 30 to 50 percent.
What is the Federal Tax Credit for Solar?
The government created Federal Residential Renewable Energy Tax Credit to entice as many people to switch to solar. The program caters more to middle class families who consider going solar out of their price range. It can be compared to a reward system. When a homeowner installs a solar power system, the federal government awards a tax credit for their investment. It is simply a dollar-for-dollar reduction of the income tax you owe.
Right now, the tax credit for solar is worth 30% of the total system cost. It usually covers the value of panels and other parts, as well as contractor fees for the installation. For example, if the total cost to purchase and install your solar system amounts to $10,000, you earn a $3,000 credit. $1 credit = $1 less you pay in taxes. Thus, if you owe $5,000 income tax in the current year and you decide to apply your tax credit of $3,000, you just have to pay the remaining $2,000. It’s that simple.
How do I claim the Federal Tax Credit?
A homeowner can only take advantage of the solar tax credit if he or she owns the system. You have two options of doing so—purchase the system outright or solar financing. Either way, you need to focus on the bigger picture. You still get the benefits of cheap, renewable energy. Since you get to use the electricity your solar panels generate, your utility bills decrease by as much as 75%. Here’s how “going solar” can affect what you pay:
In claiming the solar tax credit, it would be best to keep all receipts from the start of the project down to finish. The more money you spend, the larger your credit will be. A homeowner can either hire a local contractor or choose the do-it-yourself route and still claim the tax credit. Other expenses covered include parts and equipment, consulting fees, installer fees, engineer fees, freight shipping, permitting fees and permitting service costs.
How Do I Find Out if I Qualify?
If you haven’t heard of this program, it’s probably because of the little media attention it’s been getting. Just like many other incentives from the government, only the insiders take advantage of it. We encourage solar shoppers to act fast in order to claim their tax credits at 30%. Soon, the value will be trimmed down for residential customers until it disappears in 2022. Here’s a breakdown from theDepartment of Energy:
30% for systems placed in service by 12/31/2018
30% for systems placed in service by 12/31/2019
26% for systems placed in service after 12/31/2019 and before 01/01/2021
22% for systems placed in service after 12/31/2020 and before 01/01/2022
Homeowners may claim their solar tax credit in the same year the installation has been completed. Tax credits allow the average customer to earn a high return on investment, aside from receiving free electricity throughout their system’s lifespan. It won’t be around forever, but the good news is you still have time!
Sun Path Electric offers assistance to anyone who wants to know whether their zip code qualifies for government incentives. It’s 100% free. You just have to follow the steps below:
Step 1: Fill out our Free Sun Analysis form below.
Step 2: We will review your information then reach out to you.