Solar panels are one of the key allies to the environment. By using renewable energy, you are making an active choice to save our planet from the unnecessary usage of resources that exist in finite quantities- such as the burning of fossil fuels, for example. Renewable energy, on the other hand, is a form of energy that does not run out and can replenish itself- for example, the rays from the sun will never stop beaming down on our planet, meaning that we can use sunlight for as long as we want to power our world.
But there’s another highly appealing reason to install a solar panel on the roof of your house or place of business. Not only will it help you save money on your electricity bill, but it will also help you pay less in taxes in the form of a tax credit. Everybody likes saving money on their taxes, and the United States government realizes this- so in exchange for you doing your part to help our environment, the government issues tax credits to those who install solar panels onto the roofs of their houses or places of business.
How does a tax credit work?
When it’s time to calculate your tax bill, a certain percentage of what you paid for a certain object- in this case, the solar panel- comes off your taxes. Let’s say, hypothetically, you’re due to pay $3,000 in taxes- but you also paid for a $500 solar panel. Let’s now say that the tax credit was 25%. 25% of $500 is $125. In this hypothetical, $125 would be deducted from your $3,000 tax bill, meaning you’d only pay $2,875 in taxes that year.
Solar panels help reduce taxes thanks to the International Tax Credit
The solar International Tax Credit in 2006 will ensure that people who install solar panels between 2020 and 2022 will get a 26% tax credit on those solar panels. Naturally, that’s a big deal, as the sum of more than a quarter of the cost of the solar panel you purchased will be deducted from the amount of money you owe in taxes. However, the law will not remain so friendly forever. That tax credit decreases to 22% on systems installed in 2023, and unless the United States Congress decides to extend the law, it is currently set to expire completely in 2024.
Solar panels can help reduce your state taxes as well
Many states in the United States also have tax incentives for solar panel users at the state level as well. That includes state rebates. But if your state does not have a dedicated state rebate for solar panel installations, specific manufacturing companies will step in and provide you with some rebate value on their own.
Do you believe your house qualifies for the installation of solar panels? Would you like to schedule a home efficiency audit to make sure that your house is a true friend to our planet? Reach out to us today!