Are you considering solar panel installation for your home or business? Solar installation has become more widespread, and people everywhere are reaping the endless benefits they gain from this energy source.
Understanding solar power and the many things you can gain from it is essential as we move into an era focused on greener living and energy savings. It does wonders for the environment and can save people significant dollars on their electricity bills. Also, solar energy is not something you can run out of, and it will not cost you a lot to maintain, either.
Solar panels are known for providing people with approximately three decades of production, and there is no doubt that they will do a lot for your home, budget and carbon footprint. Investing in them this year is a call you will not regret.
What Do Solar Panels Have to Do With My Taxes?
So, what is the deal with solar panels and tax breaks? The federal government is offering money back on taxes for anyone installing solar panels sometime before the end of 2032. By working with a solar installation specialist today, you can start this journey as soon as possible, ensuring you get the most from your investment.
The Inflation Reduction Act, recently signed by President Biden, has made it easier for homeowners and businesses to offset the costs of solar panel installations to help counter the costs of rising electricity and energy bills. The former residential clean energy solar tax credit only applied through 2022 for homeowners. It extended through 2026 for businesses. It included a tax credit of 26% for solar installations, allowing residential and commercial business owners to subtract this percentage from their federal taxes relating to their solar installations.
The new tax credit sits at 30% and is available to homeowners and businesses for the next decade. If you are a homeowner who has chosen to invest in solar installation, you can look forward to receiving 30% of your bill back come tax time.
Are you a business owner? Then, the same deal applies. These credits will continue through 2032 before dropping to 26% in 2033 and 22% in 2034. If you want to get the biggest bang for your buck, then now is the time to act.
One of the major benefits of this solar investment tax credit is that it gives homeowners and businesses plenty of time to consider their solar options rather than rushing into a decision. Homeowners can benefit from this tax credit until 2032, which helps offset the cost of your solar panels regarding eligible expenses. Business owners also receive the same deal, which can help reduce costs and offset losses from the initial installation.
Some of the expenses covered under this 2022 solar panel tax credit include:
- Labor costs, including preparation, assembly and installation
- Solar PV panels
- Equipment costs, such as wiring and inverters
- Permitting fees
- Inspection fees
- Storage batteries, even if installed more than a year after the initial installation
You could receive a substantial amount of money back if you install a new solar system before the deadline. You’ll also see a return on your investment as solar power lowers your monthly utility bill.
Another benefit of this tax credit is that there’s no dollar limit on these expenses. You’ll receive the 30% tax credit whether you pay $20,000 for your new system or $100,000. This is particularly beneficial for homeowners who want to install a larger system or businesses who need more panels to accommodate their monthly energy expenditure. 8MSolar can help you find the right solar system that suits your energy needs and meets your budget so you can take full advantage of this new tax credit.
How Much Will I Save From the Tax Credit?
The answer depends on the initial cost of your system. Say you spend $24,000 on your new system, which includes the all the expenses like labor and equipment. You’ll receive a 30% tax credit, which would be $7,200 of your original cost. If you owed $7,000 in taxes come tax season, the 30% tax credit would reduce your owned taxes to zero. Remember that you won’t get any excess credit as a tax refund, meaning that the $200 left over in the example would be carried forward into the following tax year.
You can also use this tax credit, even if you’re utilizing other federal and state solar incentives. This federal solar tax credit helps residents and homeowners get the most back from their solar systems to help encourage the transition from fossil fuels to renewable energy.
On top of saving money through the tax credit, you’ll also save on electric costs since you’ll be less reliant on the grid. You can utilize net metering and statewide incentives to offset costs further. Installing a solar system will also increase the value of your home, making it easier to sell at a higher value if you ever decide to move.
Remember that you can only benefit from the tax credit if you purchase a new system. If you lease a solar PV system, you won’t be able to benefit from this incentive. 8M Solar can help you get matched with the right solar system to help you benefit from this tax credit!
The Time to Get Solar PV Systems Is Now!
If you are ready to invest in solar panels for your home or business, then the time to do so is now. These higher tax credits expire at the end of the year, so save more money in the long run by getting the job done as soon as you can. Solar installation services are just a phone call away, so contact our professional team right away. 8MSolar is eager to serve you soon.