On August 16th, 2022 President Joe Biden signed the Inflation Reduction Act into law. Included in this act is the expansion of the Federal Tax Credit for Solar Photovoltaics or Investment Tax Credit. Americans can use this tax credit to claim a percentage of the cost of their solar system on their federal income taxes.
Federal Solar Tax Credit Increases
The signing of this act extends the timeframe for claiming federal solar tax credits, as well as the total amount. If a solar panel system is installed between 2022 and 2032, owners can receive a 30% tax credit. That percentage will decrease to 26% in 2033 and 22% in 2034. If you have not claimed a tax credit for a solar panel system that was installed this year, you qualify to receive the new 30% solar tax credit.
Solar owners who have solar storage equipment such as batteries will be able to receive a federal solar tax credit for their solar storage devices that have a capacity of 3 kWh or more. This bill is a significant climate investment by the federal government and stands to help consumers save substantially on their solar panel system. Without this extension and increase, the old federal solar tax credit would have decreased the investment tax credit from 26% to 22% next year.
Professional Solar Installation
With the increase in affordability for photovoltaic solar panel systems, the amount of new solar owners is expected to drastically increase over the next several years. When searching for a solar provider to install your photovoltaic solar system, it is important that you choose one that offers a comprehensive solar service as well as one that works with you to find out the perfect solar configuration for you and your home. At Lumina Solar, our solar representatives will provide a customized solar plan that allows you to qualify for Federal Solar Tax Credit and have access to the many other solar incentives available. If you are ready to make the smart switch to clean and renewable solar, call or contact Lumina Solar today to get started.