Solar energy is a renewable energy source that you can use to offset your home’s electricity use. As an additional benefit, it helps you reduce your reliance on the grid, thus reducing your dependence on public utilities and the possibility that they might raise rates. Going solar also offers numerous tax breaks and cash incentives that can reduce the cost of going solar by thousands of dollars. Tapping into these benefits can help you save money while going solar.
Cost Benefits With Solar Energy
Going solar is a great way to save money on your energy bill and help the environment. Using residential solar energy will cut back on your electric bill so you can save money month after month. A typical system pays for itself in five to ten years with no additional costs. You can also take advantage of the solar energy credit and cash rebates from your local utility company or state government to help offset some of your upfront investment costs.
Tax Benefits Of Going Solar In 2022
Solar tax credits are a great way to lower your tax burden through residential solar energy deductions. You benefit from the federal solar energy credit, where you can deduct 26 percent of the solar installation cost from your federal taxes in 2022. However, you must own the solar system to qualify for the solar energy credit. If you sign a lease or power purchase agreement (PPA) with a solar installer, you cannot claim the solar energy tax credit since you don’t own the system. The tax credit is a deduction, not a credit. That means you subtract it from the money you are already paying to the government in taxes; you don’t get a cashback.
Eligibility For Solar Energy Credit
Installations for solar energy that qualify for the tax credit are those between January 1, 2006, and December 31, 2023. The solar system must be residential solar energy in either your primary or secondary residences or an off-site community solar project within the US. You must also own the residential solar energy system and not lease or use a power purchase agreement. You can only claim the tax credit for the original installation of the solar system. The installations costs allowable for solar energy credit include solar panels, contractor labour costs, wiring system including the mounting equipment and inverters, and storage devices like batteries.
Ask your energy provider if they offer a rebate on purchasing solar panels or look into a cash-back program. Many solar companies offer a cash-back option to offset part of the cost of your installation. The amount you save by using a rebate will vary depending on the location, type, and size of the solar panel system installed, as well as what other offers you qualify for during the purchasing process.
Get Your Solar Today
Solar energy is one of the most powerful and effective ways to make a difference in our world today. You can take advantage of rebates and the solar energy tax credit, reduce your energy costs, and produce clean energy. When you install a residential solar power system, it produces electricity when you need it. Solar panels can generate up to 90% of the electricity your home requires. Moreover, solar energy requires little maintenance, and you can recover the cost of installing solar panels through energy savings and tax credits available in most states.