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It wasn’t all that long ago that home solar power was a luxury few could afford. But innovations in recent years have greatly improved the efficiency, durability and affordability of solar power. And time may be running out to experience the federal solar power tax credit that can offset a tremendous amount of a home solar investment.
That tax credit is 26% for home solar systems installed in the year 2021. The rate changes to 22% at the end of 2022, and is set to expire altogether at the end of 2023 unless Congress chooses to renew the program. So there really is no time to lose if you want to take part in that tax credit.
Today’s Solar Power
Going solar is more practical, reliable and cost effective than ever. SunPower helps homeowners and businesses generate their own electricity and maximize their savings. And they back their systems with an Industry-leading 25-year Complete System Warranty.
One of the most exciting innovations in solar technology is the ability to store surplus energy – and even resell it back to the power company. SunPower’s SunVault Storage is a way to keep your lights on, and get you on the road toward energy independence, all managed by a sophisticated smartphone app.
Solar cells and panels have seen tremendous technology improvements, too. Compared to a conventional panel, a SunPower solar panel produces 60% more energy in the same space over the first 25 years. And SunPower’s designs have remedied many of the flaws inherent to older conventional panels, drastically reducing the reasons solar cells typically fail.
How Does the Solar Power Tax Credit Work?
So how does the solar power tax credit work? Not to be confused with a tax “deduction,” a tax credit is a dollar-for-dollar reduction that can be applied to the income taxes you owe. So if you owe $2,000 in federal taxes, and you qualify for $2,000 toward the income tax credit, you can offset your full tax bill with the credit. And if you don’t have a high enough tax bill to claim the entire credit in one year, you may be able to roll over the remaining amount to future years (as long as the tax credit is in effect).
The solar tax credit only applies to those who purchase their solar system. With a few exceptions, homeowners who lease solar equipment or use a solar power purchase agreement (PPA) usually do not qualify for the tax credit.
Most of the costs related to the solar installation can be considered when calculating the tax credit. The solar panels and equipment used for installation such as wiring/cabling, inverters, and mounting gear (including inverters, mounting equipment and wiring) are included. As are contractor installation labor costs, permitting fees, inspection costs, and developer fees. Solar storage units are also eligible in most circumstances.
Contact SunPower today to get a Free Consultation to learn how you can save with solar. One of SunPower’s solar experts will evaluate your needs and situation, and can help you compute the ins and outs related to the tax credit. Set an appointment now to get the ball rolling in time to take advantage of that 26% tax credit before it expires.