Many of the homeowners we meet throughout Phoenix and Tucson have heard about the available tax savings of going solar. But here at Energy Solution Providers, we still get a lot of questions, like “How does the Federal solar tax credit work?” and “What does a 30% tax credit mean?”
This government-sponsored program can greatly reduce the cost of your solar installation, but you’ve got to hurry! The Federal Investment Tax Credit (also known as the ITC) will be reduced to only 26% for any solar photovoltaic (PV) systems installed after the end of 2019, and will be completely eliminated by the year 2022. The Federal solar tax credit deduction will step down over the next 4 years as follows:
2019: 30% deduction
2020: 26% deduction
2021: 22% deduction
2022: deduction is eliminated for residential systems, remains at 10% for commercial solar installations.
So you may be wondering, “How do I qualify for the solar tax credit?”
Qualifying for the Federal Solar Tax Credit
The Federal solar tax credit allows homeowners to deduct 30% of the total costs related to their solar installation from what they owe on their Federal taxes. But in order to qualify for that full 30%, your solar installation must begin in 2019. This is defined as either the physical work related to your installation, or as a payment of 5% of the total installation cost.
In order to qualify, you must also:
*If your solar tax credit exceeds your federal tax liability, the Federal ITC does allow for one year of carryover for the remaining, unused deduction amount.
Once we wrap up the installation of your carefully designed solar PV system, our solar experts will help you to add up your qualifying installation costs, so you can deduct the maximum amount on your taxes come April.
Reducing the Cost of Solar Installation
When you partner with Arizona’s trusted solar experts at Energy Solution Providers, we will not only help you to qualify for the tax savings offered by the Federal ITC, but we can also help you to navigate the SRP solar rate changes, qualify for any available utility rebate programs, finance your solar installation, and identify any other money saving programs that can reduce the cost of your installation. These reasons are why it is so important to trust a solar contractor with local expertise when it comes to harnessing the renewable Arizona sunshine.
The lower your solar installation costs, the quicker your payback period. And the sooner you can offset the cost of installation, the sooner you can profit from the energy savings your solar PV system provides! We design systems that will last for decades, so you can rest easy knowing that your investment in solar will provide a financial return and can even increase the value of your home!
Curious about the tax savings that accompany your solar installation? We’ve got all the details you need! Energy Solution Providers is ready to answer your questions. Call us at 520-868-0700 or contact us today.