During the first quarter of 2021, the US added 5 gigawatts of solar capacity to its arsenal. As a result, the country now has over 100 GW of total solar installed capacity. What’s more, experts forecast the nation to add another 24.4 GW throughout the year.
Those projections are likely to come to pass due to the availability of solar rebates. After all, these programs exist to incentivize folks to go solar.
So, if you want to install solar panels this year, this rebate guide is for you. Read on to learn about the incentives that make solar more accessible and affordable.
The Federal Solar Investment Tax Credit (ITC)
The federal solar ITC is a dollar-for-dollar credit on a taxpayer’s income taxes. It has been in place since the enactment of the Energy Policy Act of 2005. Back then, it was a 30% tax credit supposed to expire by the end of 2006.
The great news is that the solar ITC is still available, albeit at a lowered rate of 26%. For your home solar power system to qualify for the 26% credit, though, you need to install it by no later than 2022. Installing it by 2023 will reduce the credit to 22%.
From there, the residential solar ITC is set to expire in 2024 until Congress decides to renew it.
If you qualify for the 26% credit, that’s the portion you won’t have to pay on your next due income tax. For example, let’s say your eligible solar PV system costs amount to $15,000. That makes your total tax credit $3,900, which you can then deduct from your next year’s federal income taxes.
So, if you had to pay $5,000, your final due payment would only be $1,100, thanks to the ITC.
State and Local Solar Incentives
Many states and local governments incentivize their residents to go solar, too. These are separate from the federal solar ITC, so be sure to take advantage of any offered by your state or city.
A perfect example is California, with its 31 state solar incentives, as per the DSIRE site. On top of those are programs offered by municipalities, such as San Francisco. At the moment, San Francisco is running a Solar Energy Incentive Program.
Another example is Utah, which according to https://blueravensolar.com/utah/, has a solar tax credit of up to 25%. The Beehive State refers to this program as the Renewable Energy Systems Tax Credit. The incentive applies to the purchase and installation costs of solar panels, capped at $1,600.
Regardless of where you live, your state or city likely has a solar energy program. The best place to check is the DSIRE website, with its up-to-date data on renewable energies.
Solar Rebates From Utility Providers
Some utility companies themselves offer one-time rebates for installing solar PV panels. However, note that most of these incentives are exempt from income taxes.
In that case, you may need to subtract the rebate from your total installation costs first. From there, you can calculate your federal solar ITC.
Another thing to note is that those rebates are usually only available for a short period. They then run out once the utility’s area has reached a specific amount of solar installation.
Take Advantage of These Solar Incentives Today
Keep in mind that the cost of solar panels has already dropped by more than 99% since 1976. However, the addition of solar rebates makes this renewable energy even more affordable. That should be enough reason to go solar as soon as possible.
Looking for more ingenious ways to improve your home or even your health and lifestyle? Head over to our site’s other categories for more inspirational guides then!