One big reason why you should go solar sooner rather than later is the investment tax credit (ITC) for solar energy. This allows owners of either residential or commercial solar systems to deduct up to 30% of the cost towards their federal taxes. There is no cap on the system size either. The average amount that a Sunlux customer would be able to deduct from their federal taxes is $9,000.
How Does the Investment Tax Credit Work?
1) You must own the solar system
- This means you are not eligible for a tax credit if you lease the solar system
2) It depends on what year it was installed in
- 2019 – 30% credit
- 2020 – 26% credit
- 2021 – 22% credit
- 2022 and onwards – 10% credit for commercial solar systems and none for residential solar systems
As you can see, time is running out to take full advantage of accommodative 30% investment tax credit for solar! If you’re a residential homeowner that has been considering solar, it is even worse for you. By 2022, the tax credit will no longer apply.
If you’ve been considering going solar, you really need to get started soon! Don’t worry if you don’t have enough tax liability to take advantage of the investment tax credit for solar. You can still roll over the entire credit into future years for as long as the tax credit is in effect.