If you’ve heard anything about solar installation, you likely already know that installing solar panels and a solar energy bank can save you money each month on your energy bills and help you maintain independence from the power grid. But did you know that solar installation can be even more affordable when you factor in federal and state tax credits? Read below to learn about how you can save even more.
Federal Solar Tax Credit
The federal government is rewarding homeowners who make the environmentally friendly choice of upgrading to solar with tax credits – and those credits can pay off plenty in the long run! Just remember that claiming a tax credit means you’ll owe less on your taxes rather than get an immediate discount on your installation cost.
How much is the tax credit?
A photovoltaic solar energy system installed before the end of 2032 will qualify for a 30% tax credit! This credit will factor in the entire cost of the system, including things like labor, permits, and equipment.
What types of homes qualify for solar credit?
If you have a solar system installed by the end of 2022, you might qualify for the federal tax credit from that tax year. Solar installation may not work for every home, so check with Good Faith Energy to see if yours is suited to installation. If you have a homeowner’s association, verify that solar panel installation is permitted for your home.
Solar Incentives, Tax Credits & Rebates Available in Texas
While you likely won’t be eligible for all of these tax incentives and rebates, this will give you a better idea about the extensive array of options that can help you save money.
Federal Solar Tax Credit (ITC)
Up until the end of 2032, installing a solar panel system will qualify you for a credit on your federal tax return worth up to 30% of the total cost of the upgrade.
Texas Solar Property Tax Exemption
A solar panel system will make your property more valuable, but Texas will not charge you additional property taxes for that amount.
If you create extra energy beyond what you need, with some utilities, you can use it as a credit to save on future electric bills.
TXU Energy Home Solar Buyback Plan
Similar to net metering, you can earn credits on your future utility bills with the TXU energy home solar buyback plan.
American Electric Power (AEP) Solar Rebate
If you receive energy from AEP, you might be eligible for cash between $2,500 to $8,500.
CPS Energy Solar Rebate
Depending on your income, location, electric provider, and other factors, you can receive a cash incentive ranging from $2,500 to $8,500.
Austin Energy Solar Rebate
Anyone living in Austin can look into qualifying for a specific solar rebate of $2,500 to $8,500.
Oncor Solar Rebate
If you are an Oncor customer, you might qualify for a rebate of $2,500 to $8,500.
USDA REAP Grant
If you run a rural business or are an agricultural producer, you may be able to take advantage of loan financing or grant funding from REAP to pay for your solar installation.
Property Assessed Clean Energy (PACE)
PACE is a Texas-based program that provides financing for energy-efficient upgrades. Once you’ve qualified for financing, you can repay the loan through a property tax assessment.
Solar Energy Devices Franchise Tax Exemption
Texas provides a tax reduction for franchises that decide to install solar energy.
How to Claim Your Solar Tax Credit
To claim your federal solar tax credit, you should complete and attach RS Form 5695 to your federal tax return (Form 1040 or Form 1040NR). See full details on how to complete the form here.
Learn More About Solar Tax Credits – Call Us Today!
While we’ve provided a summary of tax credits and ways to save money using solar installation, the tax credits and rebates you’re eligible for depending on your location, your home, the type of system you choose, and more. The best way to determine how much you can save with tax credits is to contact Good Faith Energy for a consultation. We serve residential and commercial clients throughout the Dallas-Fort Worth area, and we would be happy to provide you with more information about tax benefits before you move forward with solar installation.
Contact us today to see what Good Faith Energy can do for you!
Leave A Comment