The federal solar tax credit is an incentive that grants a credit worth 30% of the qualified costs associated with the installation of a PV solar system. The non-refundable credit is applied to your federal taxes and was enacted as part of the Energy Policy Act of 2005 in order to spark interest in the US renewable energy market.
Homeowners and businesses alike are able to claim the credit. The total value of the tax credit can currently be calculated by taking 30% of the solar system cost – and there is no limit to the value of the credit.
While the solar tax credit has made solar significantly more affordable, it will begin to decline in 2020. In 2022, the credit will disappear completely for residential systems and will permanently drop to 10% for commercial systems. We’ll show you your total potential savings with the credit, what’s expected to change, and how these changes will impact the solar industry as a whole.
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