According to the Solar Energy Industries Association, there are currently 2.7 million solar systems installed across the country.
It seems like every homeowner wants a solar panel system these days. But considering the current state and Federal solar incentives, that’s no wonder.
That’s right: you can do good for the environment all while saving money. Don’t believe us? Then you better keep reading to learn about the top solar panel incentives you can take advantage of in 2021.
Federal Residential Solar Tax Credits
Congress signed the 2020 Year-End Spending Package into law in December. And this package had big implications for residential solar tax credits AKA investment tax credits (ITCs).
Previously, the government planned to stop offering ITCs to homeowners after 2021. Now, the Federal government intends to offer a 26% tax credit in 2022. Plus, this amount will only drop down to 22% in 2023.
What does this mean for you? You can deduct 26% of the price of your home solar system from your 2022 Federal taxes. Starting in 2023, you can deduct 22% of the price of your solar system.
State Residential Solar Tax Credits
Depending which state you live in, your residential solar system may qualify for even more tax breaks. Some US states offer additional solar tax credits to homeowners.
State tax credits work the same way Federal ITCs do. You can deduct a percentage of your solar system’s cost from your state taxes. To find out whether and how much you can deduct, visit you state’s solar tax credit information page or visit this link.
State Solar Performance-Based Incentives
Some states and certain utilities companies also offer performance-based incentives (PBIs). PBIs allow residential solar system owners to get paid for the excess energy they produce.
Your state or local utility company will pay you per kilowatt-hour of energy your home produces. This can be particularly profitable during months when your home produces more solar energy than it uses.
Solar Power Purchase Agreements
Solar power purchase agreements (SPPAs) are unique arrangements between homeowners and solar panel providers. SPPAs allow residents to harness the benefits of solar energy without having to invest a dime.
How is that possible? Companies like Blue Raven Solar will pay for you to install a solar panel system in your home. You pay an astoundingly low cost for energy until your system is paid off.
The only catch is that the company providing the SPPA gets to file the Federal and state tax credits. Still, that’s a low cost for the relatively high return of getting a cutting-edge solar panel system for your home.
Solar Incentives in 2021: The Bottom Line
Federal state tax credits and PBIs can help you save money on your pre-existing residential solar panel system. Meanwhile, solar incentives like SPPAs can help you afford a solar system if you don’t have one already.
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