On his first day in office, President Biden signed the Paris Agreement. This accord means the USA has committed to cutting down its use of fossil fuels and reach zero gas emissions by 2050.
As a result, the Federal Government rewards owners of green homes with attractive solar tax incentives to help get them on board.
Keep reading to find out how you can save when you help build back better by investing in clean energy.
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We all know that solar panels can drastically reduce our electricity bill and help slash carbon emissions. We also know they’re an expensive investment.
Fortunately, you can get some of your outlay back by deducting 26% of the cost of your solar energy system from your taxes. So, you’ll pay $2,600 less on your taxes if you install a $10,000 system.
In 2023, this saving decreases to 23% and in 2024, it disappears forever. So, it makes sense to get on board with solar as fast as you can.
These tax credits apply to the equipment, labor, and installation costs of your solar panels. According to Blue Raven, you can still enjoy tax credits if you don’t pay cash for your solar panels upfront.
You can also carry your credits forward to the next year if you can’t take the full credit immediately.
So, if you install your panels this year after tax season, you’ll get the same credit on next year’s taxes. You must install your solar energy system by December 31, 2022, to qualify for credits in 2023.
If you need to install a new roof to house your solar panels, you can’t claim a portion of these costs from your tax. Solar shingles and solar tiles qualify as solar panels, so you will receive a credit on these innovations.
Some states have implemented additional measures to encourage the switch to solar. These benefits usually include property taxes and further tax incentives.
When you install solar at your home, you increase its value. That means your property tax automatically increases. Through solar property tax exemptions, you don’t need to pay for this extra value.
Other states give you a long-term reduction in how much extra you pay on your property taxes. There are currently 36 states offering these exemptions.
Through these incentives, which are in place in 17 states, you pay no sales tax on your solar installation. So you could save up to 9.5% on the upfront cost of your solar energy system, depending on where you live.
Plus, there are already another five states where you don’t pay sales tax at all.
Depending on where you live, these sales tax exemptions apply to different aspects of your installation. For instance, in Arizona, you don’t pay tax on the purchase price or installation of solar energy devices.
In Colorado, you pay no sales or use tax on anything to do with the sale, storage, and use of solar devices and anything used to generate solar power.
Solar tax incentives are just one of the ways to save with solar. You can also take advantage of net metering to save on electricity or go off the grid and never pay an electricity bill again.
Apart from all that you’re contributing to a brighter, safer future for us all.
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