While the cost of solar energy has arguably decreased over the years, it still requires a considerable amount of investment in the solar panels, for both home and business owners who wish to decrease their monthly bills. Governments and states in the USA have decided to introduce solar energy tax incentives, that make solar installations more accessible and affordable, so that people are more willing to invest in solar energy for their estate. Such incentives can take thousands of dollars off your initial investment, anywhere from 25 to 50 percent.
Why solar energy?
Solar energy can be a great way to reduce your carbon footprint as it generates clean and renewable energy, with zero indications of harming our planet. Unlike fossil fuels such as coal and natural gas, solar energy does not release any harmful pollutants or greenhouse gas emissions into the air, which makes it extremely safe and environmentally friendly. The way forward for a sustainable future is investing in solar, and we are going to speak about solar energy tax incentives and how it will help you take the next step
Your options for solar tax credit 2021
There are numerous solar energy tax incentives intended to help you afford solar, here are some of the main ones we think you should know about.
The federal investment tax credit (ITC)
The ITC is by far the most credible solar energy tax incentive out there. It is a solar energy tax credit, which allows you to deduct 26 percent of the cost of installing your solar energy system out of your taxes. In fact, the ITC has helped the solar industry grow by over 10,000 percent since 2005. The long-term stability of this federal policy has allowed businesses to continue driving down costs and has resulted in a stronger and greener economy.
Solar renewable energy certificates (SRECs)
Renewable portfolio standards are now required by most states, which entail utilities to procure or generate a certain percentage of their electricity from renewable resources, including solar power. Once you own solar panels, you can get a return on your solar production by selling SRECs, given that they comply with state-level renewable energy requirements. If you live in a state with a strong SREC market, then you are guaranteed a high income.
State solar energy tax credits and cash rebates
Number of states are offering additional solar energy tax credits and cash rebates for installing solar panels. The rebates can fluctuate, as they are available for a limited time only and are based on the amount of solar installed in your region, but they can reduce your costs by 10-20 percent.
Your state or municipality might offer property or sale tax exemptions, it may not benefit you as much as the previously mentioned solar energy tax plans, but it is an additional advantage. With tax exemptions, your state will not include the value of solar panel systems in your property assessments. As solar systems massively increase the value of your property, you will be able to benefit even more from the return.