What is the Federal Solar Tax Credit?
In 2006, the government introduced the Federal Solar Tax Credit, with the purpose to incentivize the solar industry. Since then, it has grown by 10,000% making it a huge success in providing residential homeowners with an accessible opportunity to acquire solar power for their households.
How does it work?
If you have purchased a solar photovoltaic (PV) system, you could be eligible for this incentive to lower your tax bill. For example, you can receive a credit of 30% for the cost of the equipment installed.
What does it cover?
The credit covers the following items:
Example: What if you have a 30% credit?
Solar Panels
Energy Storage
Solar System Installation
Solar panels + An energy storage unit + The cost of installation totaling $30,000 will receive a $9,000 Investment Tax Credit (ITC).
*Figures represent examples based on project costs.
Other Limited-Time Savings Available to You
- Tax credit for home builders – More clean energy homes on the market.
- Up to $7500 tax credit on electric vehicles (EVs) – Qualified taxpayers who purchase a car that meets certain conditions can receive a tax credit.
- 30% tax credit on EV chargers – EV drivers tend to charge their cars 80% of the time at home, for qualified buyers this is big news.
- Up to $4,000 rebate on breaker box upgrades and $2,500 on electrical wiring – Time for home repairs? You could be eligible for rebates on these upgrades that might be required before adding solar.
- NEM 2.0 – By April 13, 2023, the current NEM 2.0 rates will change. The value of the credits you receive for the excess energy you create will be reduced by around 80%, known as NEM 3.0. You can lock-in the best rate, and keep it for the next 20 years, if you decide to go solar now. Read more about NEM 2.0 here.