21 Dec What Is a Solar Tax Rebate and What Can It Do for Me?
There are so many ways to save money when you invest in solar, one exciting way is the solar tax rebate.
It’s so easy to take advantage of! The solar rebate is a 26% refund on your federal taxes when you get solar panels installed on your residential or commercial properties through 2022.
How Does It Work?
Unlike a tax deduction, which reduces the amount you pay taxes on, this credit simply reduces the amount that you owe at the end of the year. Think of it as a “subtraction” from the amount you owe the government.
The BEST Part: There’s no cap on the value you can deduct! No matter how complicated or time-consuming the install, you will get a 26% credit if you install through 2022.
How Long Will this Credit Last?
The solar investment tax credit (ITC) was initially scheduled to lapse at the end of 2007, but lucky for us, it has been extended in increments since then. The original tax credit was 30%, and was scheduled to drop down to 22% in 2021, but Congress extended the ITC at 26% with the latest stimulus bill. Through the end of 2022, you’ll be able to deduct 26% of the cost of the system from your taxes.
Long story short: Get it while it’s hot! This deduction won’t last forever.
How Much Will I Save?
The federal solar tax credit gives you a credit of up to 26% of the cost of installing a solar energy system. This includes the cost of materials, installation, permits, and warranties! With this in mind, if it costs you $25,000 to purchase and install a system, then you would receive a $6,500 credit on your taxes. What’s more – you can take advantage of this credit even if you finance your system. Learn more about financing your system here.
Be warned: This credit only applies if you are the owner of your solar system, not if you lease the system.
How Do I Claim It?
Claiming your ITC credit is easy. Just keep your receipts and use IRS Form 5695 to claim your credit when you do your taxes for the year of installation. If this sounds like as good a deal to you as it does to us—don’t wait! We’ve been helping thousands of Texans go solar for over a decade, and we’re just getting started. Contact us today to get your free quote.