Solar Tax credits made simple. Here's what you need to know.
IF you earn money and pay / or owe FEDERAL income taxes on those
THEN you are eligible to have those FEDERAL tax funds either refunded OR excused
IF you have made a purchase for solar in that TAX year.
The Value of your tax credit is dependent on the Gross cost of your system
IF you don’t purchase solar, the government will KEEP that money.
The federal solar energy tax credit was renewed in October 2015 at 30% until the end of 2019 which it will then start to decrease gradually thru 2023
Provisions of the Federal Solar Power Tax Incentive
The solar investment tax credit (ITC) stipulates that:
- Both residential and commercial solar energy installations are entitled to a 30 percent federal investment tax credit.
This means 30% of the cost of a solar PV system can be claimed as a credit against tax liability.
- The tax credit is a 1-to-1 offset of tax liability, not to be confused with a write-off or a depreciation schedule.
- Unused portions of the tax credit can be carried forward to
subsequent years until the credit is exhausted.