How to Take Advantage in 2021
Whenever you hear the words “Tax Credit” it should be music to your fiscally minded ears. A completely legitimate way to save money while helping yourself out in the long run. While researching solar panels, you may have run across the solar Investment Tax Credit, also called the federal solar tax credit.
The current federal solar tax credit guidelines were extended through 2022 when former President Donald Trump signed the Consolidated Appropriations Act. This is great news for anyone interested in getting a residential solar panel system in the next two years for a whopping 26% tax.
Tax Credit Math Lesson
Just how much will that 26% tax credit save you? Let’s say you pay $14,000 for a solar panel system in 2021, you would be eligible for a $3,640 tax credit. You must also remember that any other incentives from your state or utility company aren’t included in the total. So if you receive $4,000 in state or utility incentives, only $10,000 of the original $14,000 cost could be applied to the federal solar tax credit, taking the total credit down to $2,600.
If you don’t take advantage of the current 26% tax credit, you’ll get less money back if you buy solar panels after 2022.
Requirements for Tax Incentives
- Your solar system must be installed in the calendar year the tax credit is active
- The system must be located in the US at a primary or secondary residence
- You must be the owner of the system, having either paid with cash or through financing
- The solar system has never been installed or used before
What Expenses Are Included?
- Solar PV panels or PV cells used to power an attic fan (but not the fan itself)
- Contract labor costs for onsite preparation, assembly, or original installation, including permitting fees, inspection costs, and developer fees
- Balance of system equipment, including wiring, inverters, and mounting equipment
- Energy storage devices that are charged exclusively by the associated PV panels
- Sales taxes on eligible expenses
- There is no maximum amount that can be claimed
For More Information
At NC SOLAR NOW, we are North Carolina’s Most Trusted solar panel installer and embrace the philosophy that solar is for everyone! We’ll be by your side from your first free virtual consult through our warranty period and beyond. Visit us online at NC SOLAR NOW, send us a message, or call us at 919-833-9096.