There are numerous tax credits out there for home and business owners to take advantage of. Both on the state and federal level. As we begin 2020, there are some things that you’ll want to be aware of – particularly when it comes to federal taxes.
The federal solar investment tax credit was introduced back in 2006, and since then it has undergone a pretty major evolution. It was initially set to expire in 2007, but it has been extended on multiple occasions due to its effectiveness in attracting people to solar energy.
Since its introduction, the solar industry has grown more than 10,000%!
In this post, we’ll update you on what you can expect and how it’s set to change moving forward.
Where the Solar Investment Credit Currently Stands
The extension that this tax credit is currently running on is set to expire in the year 2021. Up until the year 2019, those purchasing solar equipment for residential and commercial use could deduct 30% of the purchase cost on their taxes.
As this extension approaches its end, the amount that people are able to deduct will continue to drop. The good news is that in the year 2020, those who purchase solar equipment are still able to claim 26% of their equipment cost!
There’s no cap on how much, either – which makes it even more affordable to invest in quality equipment that’ll last and be worth your while.
Most equipment purchased from reputable manufacturers and installation companies lasts upwards of two decades.
After the Year 2020
If you want to make the switch to solar energy, now is the time to do so. Until the year 2021, you’ll still be able to take advantage of the investment tax credit – but the amount is set to drop pretty drastically. You’ll go from being able to deduct 26% to 10%.
If you hold off until the year 2022, you’ll still be able to claim 10% – but only if you’re a commercial operation. The last year for homeowners to utilize the credit, as things currently stand is in the year 2021.
Other Important Considerations
The Solar Investment Tax Credit is only available for homeowners and commercial operations that purchase their equipment.
If you opt to take advantage of solar PPAs or lease your equipment, you will not be able to utilize this federal credit.
However, depending on where you live, you may still be eligible for some statewide incentives!
With all of that being said, if you’re looking to purchase your own panels – now’s the time to do so if you want to squeeze the maximum savings out of your equipment.
At Lumina, we go out of our way to make each installation a seamless process for the people we work with. We even take care of all of the “red tape” stuff like permits paperwork!
When you work with us you can trust that you’ll receive the best of the best in both service and equipment.
Ready to take your savings beyond tax credits and into the decades to come?
Reach out to us at anytime for a free quote and consultation!