Ready for some serious savings on both your taxes and your electricity? If you own a solar system, and you pay taxes—you’re in luck! The federal solar tax credit, also known as the investment tax credit (ITC), makes solar more affordable for many Americans and heavily contributes to the stellar ROI of investing in solar. And just because it involves taxes doesn’t mean it’s complicated, either—in fact, the solar investment tax credit is simple to understand and use.
Here’s what you need to know about saving on your taxes with solar:
What is the Solar Investment Tax Credit?
Essentially, the solar investment tax credit just makes it cheaper for folks like you and me to install solar systems on our homes and businesses. 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. You are eligible for this credit regardless if you decide to finance your solar panels with Zero Down financing with Sunlight Financial and Dividend Solar Finance. That’s a pretty great deal!
Fun fact: There’s no cap on the value you can deduct! No matter how complicated or time-consuming the install, you will get a 30% credit if you install through 2032.
How Long Will this Credit Last?
As part of the recent Inflation Reduction Act of 2022, the Federal Investment Tax Credit (ITC) has been increased to 30% and extended for 10 more years. This is great news for Texans who installed solar in 2022 and for new installations to come. All solar installations now through 2032 will receive this 30% tax credit.
How Much Will I Save?
The federal solar tax credit gives you a credit of up to 30% of the cost of installing a solar energy system. That 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 $7,500 credit on your taxes. Be warned: This credit only applies if you are the owner of your solar system—even if you finance it—but not if you lease the system. That way, you can still take advantage of this benefit of having solar.
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.
Are there other rebates and incentives available?
Learn more on our website about the available solar rebates and incentives that will add money right back into your pocket.