A solar panel system on your home in the North Bay, CA, comes with many benefits including energy independence, reducing your carbon footprint, and saving money on your utilities. Your solar panels may be able to save you even more money if you’re eligible for a solar tax credit! Keep reading to learn more about available solar tax credits and to see if you’re eligible for a tax return credit next tax season.
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The federal residential solar energy credit can be claimed on an individual’s federal tax return. It is for homeowners who paid for a solar panel system to be installed in their homes in 2020, 2021, or 2022.
If your solar PV system was installed in 2020 or 2021, you are eligible for a tax credit of 26% of the total cost of your system. For example, if your system costs $20,000 you would be eligible for a tax credit of $5,200.
Congress extended the solar tax credit in August 2022, raising it to 30% for solar panel systems installed from 2022-2032. That means if your system was installed this year, in 2022, you can get up to 30% of the cost back during tax season. For a $20,000 system, that’s a $6,000 credit. What a perfect way to help the planet and your pocket!
To be eligible, you have to meet certain criteria. First, your solar panel system must be installed after 2017 and installed on your house in the U.S. You also need to have financed or purchased the system. Unfortunately, the credit doesn’t apply if you are leasing your solar panel equipment, or if your solar panels aren’t new or aren’t being used for the first time. To figure out what you are eligible for, we strongly recommend you reach out to a professional solar installer, such as Summit Technology Group, to begin the process of integrating a brand new solar system into your home.
In addition to the federal tax credit, state incentives can be used to increase your state tax return credits. Homeowners can keep their property taxes from rising until 2024 if they install a solar panel system under the Solar Energy System Property Tax Exclusion.
The Self-Generation Incentive Program also offers residents a rebate for the installation of an energy storage system. In partnership with the SGIP, the Equity Resilience Incentive assists homeowners who are low-income, live in high-risk fire areas, or have experienced Public Safety Power Shut Offs at least twice with an even bigger credit per kWh. This program gives homeowners a rebate for installing an energy storage system such as a backup battery. The rebate is determined by the type of battery and kWh capacity and where it is located.
Of course, it’s always best to consult with your accountant or tax adviser to see how these incentives will affect your income tax filing.
Installing solar panels on your home in the North Bay, CA isn’t just good for the environment. It can also be good for your wallet! Contact Summit Technology Group today if you’re ready to start your solar PV installation before incentives run out!
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