What are Solar Energy Tax Credits for Homeowners?

Federal tax credits, state incentives, local secrets...what’s out there for solar families?

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The following are solar energy tax credits:
1. Federal Tax Credit
2. State Solar Tax Incentives
3. Other Local Incentives
4. Net Metering
Cash Bonus?

There’s a lot of noise out there about this incentive or that credit for solar panels. What do you really need to know?

Firstly, there’s a lot of information out there because there are SO many different ways for solar customers to cash in. Depending on what you go for and where you live, you’ll qualify for different incentives.

Secondly, you should know: most incentives apply to a purchase of the solar system rather than a lease, but leases have their own savings and bonuses attached. For all these reasons, your best bet to find out exactly what you’ll qualify for is to speak with a solar expert.

There are, of course, a few things that are always applicable. The federal tax credit for homeowners covers the entire United States. States’ incentives can be similar enough to mention as well.

So — what are the federal and state incentives for going solar?

  • Federal Tax Credit

Homeowners who buy their home solar system can get 26% of the total cost of their system credited on their 2020 taxes. This applies for the rest of 2020; after 2020, the tax credit decreases down to 22% in 2021, and then down to 10% in the following years.

We need to stress the importance of contacting Sungevity soon — the credit applies to the year that your solar panels begin operation, and you need to allow for time to install and permission to operate. That means if your panels get installed on your roof in December but don’t start producing that electricity until January, your tax credit will apply for 2021. That’s a big difference in how much you get credited from the federal government — so don’t wait!

How Do I Claim A Federal Solar Energy Tax Credit?

You claim the federal tax credit for solar when you file your yearly federal tax return. Remember to let your accountant know you’ve gone solar in the past year, or if you file your own taxes, simply use form found on the IRS website.

  • State Solar Tax Incentives

Unlike the all-reaching federal incentive, state solar incentives vary from state to state.

Some states, such as California, offer Solar Renewable Energy Certificates (SERCs), which allow homeowners to sell certificates for energy to their utility company. You earn one SERC for each thousand kilowatt-hours (kWhs) your solar panels produce.

Many other states have exempted solar energy equipment from state sales and use taxes, such as New Jersey.

  • Other Local Incentives

Like the states, county governments, city governments and other locales will have varying solar incentives. There are hundreds and hundreds of different ways to save money or get money back with solar, and it can get pretty confusing pretty quickly.

Don’t worry — our solar experts will get every possible local credit, rebate, or cash offer your area has to offer.

  • Net Metering

Some areas offer net metering, where your utility actually pays you if your panels produce more electricity than your family uses.

Do you live in an area that offers net metering? Contact us and we can find out for you.

Cash Bonus?

Some homeowners qualify for a cash bonus upon switching to solar. With Sungevity, you may even qualify for six months’ worth of free electricity. It’s free to find out if your home is in an area that qualifies, and there’s no obligation to buy anything to learn what’s available to you. Fill out our simple online form today and get the info you need to make the best decision for your solar needs!

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