Are you considering investing in solar energy for your home or commercial property? Making that decision sooner rather than later will impact potential tax credits available to you.
The investment tax credit (ITC), also known as the federal solar tax credit, allows you to deduct 26 percent of the cost of installing a solar energy system from your federal taxes. The ITC applies to both residential and commercial systems, and there is no cap on its value.
While the tax credit for solar is not new, the percentage available for deduction will be diminishing. The credit was 30% in 2016-2019, 26% in 2020, and 22% in 2021. No residential solar tax credit will be available after 2021 unless the tax credit is extended, however a permanent 10% tax credit for commercial use will remain.
There are many factors to consider before installing solar panels. Various factors include the cost of electricity in your area, the shape of your roof, and resale value. As to how solar panels will impact the resale value of your home, Zillow estimates that solar panels will increase the value of your home by 4%.
A great website for resources on solar energy is EnergySage, which recently put together a report on how much solar panels would cost to install in your area.