In 2021 federal solar panel tax credits will be worth 22 percent of purchase and installation costs. That is down from 26 percent this year, and significantly less than it was in 2019 when it was at 30 percent. This applies to both new construction and current homes.
You can save a lot of money from simple residential tax incentives, that have been put in place to help residential homeowners of all demographics from across the United States.
Keep reading for our quick guide to solar panel tax credits.
Solar Companies Help You Save, and Save You a Headache
The average cost of a residential solar system is about $18,000. When this year’s tax breaks are applied, the price is reduced by 26%, for a savings of $4,680, and costing a total of $13,320. This calculation includes both the cost of hardware, like the panels themselves, and permitting and installation costs.
Finding a company that will help you with these hefty upfront solar panel installation costs by offering benefits like 18 months free, a 25-year warranty, and multiple low APR options, is worth your time. Blue Raven Solar offers all of that, and even handles the local permitting processes for their customers. They set their customers up for success with an app to monitor the performance of the panels and they offer single-day installation.
Solar Panel Tax Credits
The solar tax credit will cover every detail of the process, except for the sales tax. This includes installation costs, like wiring and piping, which are hard to determine until the project is complete. Credits are available for residential homes and second homes, and commercial properties.
To receive the solar panel tax credit, you must have a tax liability, meaning you must pay taxes, in the same year as the installation. This usually applies to everyone.
You can also receive a solar tax credit from your state. Use this calculator on Energy Sage to determine what solar rebates or tax breaks are available to you.
Making Money From Your Solar Panels
Each state is different, but some states offer solar renewable energy certificates or performance-based incentives in addition to tax credits. Both of these programs allow solar panel owners to make money by selling the clean energy they create at home.
But, these benefits and residential tax incentives can only be received by the owner of the panels. If you lease the panels, you will not receive the rebate. If you need to take out a loan to purchase the panels, you are still considered the owner and can be the recipient of those incentives.
Environmental Benefits to Solar Energy
A solar power system on a residential home will offset 80 tons of coal, which is equivalent to planting 4,000 trees or save 4 million gallons of water. Many people want solar panels now for the money-saving benefits and to have more control over their energy production. Learn more about environmental benefits and some of the current concerns surrounding solar energy, in this US Department of Energy factsheet.
Green Home Improvement
The technology behind solar panels was invented in 1954. Over the past 66 years, scientists and industry experts have been improving the lifespan and efficiency of solar panels. Because each state and even each municipality have different regulations surrounding solar panel installations, starting the process is often the most daunting part.
Solar panels will save you money, increase your home’s value, and help fight climate change. If you want to learn more about solar panels or solar panel tax credits, check out our website!