Estimated reading time: 2 minutes
The federal government has been interested in solar since the 70s, and if you haven't heard yet, they want to pay for 26% of your home solar build-out.
It's an amazing offer that unfortunately won't last forever. The program, also referred to as the Solar Investment Tax Credit (ITC), is set to reduce to 10% in 2023 and be completely gone by 2024.
Because of this, solar companies and homeowners are going nuts, rushing to get their system at a large discount.
Some people hypothesize that the price of solar will come down enough to offset the loss of the tax credit, but historical price reductions over the last year have only dropped a few percentage points - not anywhere near the 14% drop that is slated to occur in 2023.
For current statewide incentives offered to solar owners, check out our article, "State Incentives for Going Solar [Full Guide]."
A common question - Does Project Solar qualify for the federal tax incentives?
Yes, absolutely. Even if you opt for DIY install, you are still qualified for a tax break of 26% of your invoiced total.
The tax credit has no limit, so you can size the system as large as you want and reap the full benefits.
An average Project Solar customer saves $3,500 with their ITC credit.
Note: To be personally eligible for the ITC credit, you must own your system (Project Solar does not offer solar leases). Also, if you will have no tax liability the year you plan to install your system, and you don't plan to have tax liability in the near future, you will not be able to take advantage of the credit.
Remember, the ITC is not going to come right away as a check in the mail, returning the full 26% of your solar project's cost. You can’t take a credit larger than the tax you owe because the ITC is a “non-refundable” tax credit.
If what you owe in a year is not equal to the full 26% of your solar project, your credit will not expire—the remaining amount will carry forward to future years.
How to Get the Tax Credit
Step 1. Fill out the form 5695
Although it's two pages, this form really only has a few questions pertinent to the average consumer. There are additional credits available for wind, geothermal, and fuel cells, but most will just need to fill out the solar and possibly the battery component, so don't get overwhelmed (we can also assist if needed).
Step 2. Add the total from form 5695 to your standard tax document. If you do not have a large enough tax liability for the year, you can carry over the credit into future years.
It's that easy. Keep a copy of your invoice on hand in case you get audited, but other than that, there are no other approval processes or hoops to jump through.
Get started now by using our free quote estimator.