A Quick Overview of Solar Tax Credits and Rebates

Apr 22nd 2024

A Quick Overview of Solar Tax Credits and Rebates

When it comes to renewable energy, solar power is a beacon of sustainable energy for residences and businesses. However, one reason people hesitate to implement this solution is the expense of buying and installing a photovoltaic (PV) system.

Thankfully, various government incentives are available to ease this costly burden and motivate more people to make the switch to solar. Explore this quick overview of available solar tax credits and rebates for residential and commercial solar PV systems.

The Federal Residential Solar Energy Credit

The Federal Solar Tax Credit, also known as the Investment Tax Credit or ITC, offers homeowners a 30 percent deduction on the cost of installing a solar energy system from their federal taxes. Solar PV systems bought and installed for businesses, nonprofits, and local governments are also applicable for the tax credit. This federal tax credit applies to any US residential system installed until 2033, along with bonus credits like the Domestic Content Bonus, the Energy Community Bonus, and the Low-Income Bonus. The next decade is the time to take advantage of this tax credit, as it’ll decrease after 2033 and expire after 2036.

The Production Tax Credit

The Production Tax Credit (PTC) does not apply to homeowners, but it’s highly beneficial for businesses. This incentive helps companies by offering a tax credit for every kilowatt-hour of electricity generated by renewable resources, such as solar, for 10 years. While it’s not a part of an individual’s tax return like the ITC, the PTC is a significant support mechanism for commercial solar projects, making it considerably more feasible to justify from a financial standpoint.

State Incentives

States across the US are taking sunny savings into their own hands, offering various additional solar incentives. These can range from cash rebates to performance-based incentives, property tax exemptions, and sales tax exemptions. Each state’s incentives include nuanced regulations and eligibility criteria, which means checking your region’s particular programs is important. Fortunately, the Database of State Incentives for Renewables & Efficiency (DSIRE) is your map to these incentives, laying out the credits that could be waiting for you to claim.

In wrapping up our quick overview of solar tax credits and rebates, it’s clear that these financial sweeteners are real game-changers. They make solar more accessible, advance the clean energy agenda, and lead to a decrease in our collective carbon footprint.

If you’re buying and installing a new residential or commercial solar PV system, you must ensure it’s properly labeled for compliance and safety. Fortunately, Get Solar Labels offers high-quality solar placards for commercial and residential projects. Find affordable and highly durable labels when you visit Get Solar Labels today!