Solar energy accounted for 46 percent of all new electricity growth in the United States in 2021. Solar panels power more than 23 million American homes. Solar installation reduces your carbon footprint and is far better for the environment than traditional electricity production.
And while upfront solar investment is expensive, you can get some of your money back. Rebates from the utility company and solar tax credits from the federal and state government are ways to recoup your money.
Here’s a deeper dive into getting your money back from your solar investment.
Your solar investment at your home means you won’t have to rely on the power grid. You can sell any unused solar power back to the utility company. The power company refers to these as a net metering credit.
Thanks to solar energy, you can save thousands of dollars each year on your monthly electric bill. Imagine never receiving an electric bill again! And if you drive a solar vehicle, you’ll save even more.
Net metering varies from state to state, depending on laws passed by the state legislature.
Saving for retirement, traveling, and investing are ways to use the extra money you will receive thanks to solar installation.
Federal Solar Tax Credit
Solar panels for your home can cost up to $20,000, but federal tax credits can offset the cost. For example, $1,000 in solar tax credits will reduce your federal tax bill at the end of the year.
To get the solar tax credit at the federal level, you must install the solar power system in a home in the U.S. The home must also be your primary or secondary residence.
You must also own the solar energy system, which means it’s not part of a community solar farm. Tax credits are also good only on the original solar system.
If you have questions, it’s best to talk with a tax professional. A good accountant can walk you through the process and get you the biggest refund.
State Solar Tax Credit
Additional solar tax credits can come from the state government. These tax credits do not reduce your federal rebate. Each state is different.
The government will waive the sales tax on your solar energy panels in some states.
There are limits to how much in tax credits you can take – usually up to $10,000.
California, Texas, Minnesota, and New York have the highest state solar tax credit programs. Some states offer an upfront rebate on solar installation.
Earning Money on Your Solar Investment
You can earn money on your solar investment through the utility company and federal and state solar tax credits. While each state is different, the federal government will give you a significant rebate for harnessing the sun’s power.
Please read our website for more information on how you can save money with solar energy. It will give you peace of mind knowing you are saving money and helping the environment simultaneously!