Solar has come down in price a lot over the last couple of years; however, it is still out of reach for a lot of people. There are different tax credits available that can help cut down the out-of-pocket costs of solar and provide an incentive to installing solar. Here is a basic overview of the federal tax credit available to residences and businesses alike.
The Federal Tax Credit for solar installations allows for a 26% tax credit on costs at installation. The Business Energy Investment Tax Credit (ITC) states that 26% (updated 2021) for solar, wind, and fuel cells is available and 10% for geothermal and microturbines.
The maximum incentive is $1,500 per 0.5 kW for fuel cells, so there is a cap to the tax credit. Microturbines are only $200 per kW. If you install solar on your business and want to claim the tax credit, you need to fill out IRS Form 3468.
Residential Federal Tax Credits include solar electric, solar hot water, wind turbines, geothermal heat pumps, and fuel cells. There is no maximum on most of these for the credit and it is 26% (updated 2021) all the way around. There is more information on DSIREUSA’s website along with Energy Star and you will need to fill out IRS Form 5695.
Both Federal Tax Credits are available till the end of 2025 as of now. This may or may not be extended beyond and we won’t find out for quite some time. If you are looking for money to help your solar installation, make sure to push while the money is still available.
State incentives vary depending on what state mandates are available. Hot solar states provide better incentives than states that aren’t pushing for renewable energy installations. To find out what incentives are available in your state, DSIREUSA’s website is the best resource. You can also contact your local power authority to find out if they provide additional incentives for using solar on your home or business.
Solar is completely feasible, but make sure you jump on board while the financial help is still available. What other questions about going solar do you have? Let me know below and I’ll make sure to answer them.