When you invest in solar power, the Federal Government has a powerful incentive available: a 30% federal tax credit on any solar system purchased. Unlike a tax deduction, the solar tax credit is a direct reduction in your tax liability. This means that you will get 30% off on any system you purchase back - for example if you have a $10,000 tax credit, and you owe $10,000 in taxes that year, you will pay nothing!
However, 2019 is the very last year to take advantage of the full tax credit. Let’s explain a little more:
What is the Solar Tax Credit?
The tax credit is 30% of your total system cost. If you bought the system for $10,000, you will receive a $3,000 credit. Here are the following requirements to get this tax credit:
- You must own the system. This tax credit doesn't apply to systems bought through leasing.
- You have an income tax liability. If you pay no taxes, a tax credit wouldn’t benefit you.
If you aren’t able to use the full amount of solar tax credit in one year, it will roll over to the next year. So if your tax credit is $6,000, but you’re only paying $5,000 that year, you will have $1,000 to use for next year. This can be very helpful for homeowners purchasing large systems.
After 2019, the solar tax credit will decrease every year, going to about 10% by 2022. Additionally, due to high demand, we anticipate solar prices to rise throughout 2019 - meaning that now, before demand skyrockets and the tax credit runs out, is likely the best time to buy solar.
Going solar has a lot of benefits: long-term savings, energy independence, positive environmental impact, and it can even help you eliminate your tax liability. See what your tax credit might look like through our solar calculator. Request a quote today!