At this very moment, the solar panel incentives you can receive are at their peak. For people living in Wisconsin, that means you could save up to 50% off the cost of a new solar energy system between federal and state credits and rebates. For homeowners living in Illinois and Minnesota, it’s up to 55% off. And for the lucky businesses in Minnesota, it’s up to a whopping 70% off commercial solar installs!
These incredible solar incentives won’t last forever though. In fact, they begin dropping in just a few short months, at the end of 2019.
To help you understand the upcoming changes and how it impacts your home or business, we’ve put together important details about solar incentives and the renewable energy tax credit.
What is a solar incentive?
A solar incentive is a tax credit or rebate that helps offset the cost of installing a solar energy system in a home or business. Many states have their own unique solar incentive programs with varying savings (you can learn more about those incentives for Wisconsin, Illinois and Minnesota here).
The federal government also has a separate tax credit, called the Investment Tax Credit (ITC). The ITC was first introduced in the Energy Policy Act of 2005. At that time, it was set to expire in 2007. A handful of extensions pushed that out to 2016, and then the program was again extended by Congress for an additional five years to allow the program to meet its full maturity by 2021.
Why is the solar incentive being reduced?
The ITC offered a maximum tax credit of 30% from 2016-2019, meaning that homeowners and businesses could deduct 30% of the cost of the solar energy system from their taxes. Starting in 2020, the credit reduces to 26%. In 2021, that rate decreases again to 22%. In 2022, the rate drops even further to 10%, but is only available for commercial solar panel installations. Homeowners will no longer receive a tax credit in 2022.
When can I claim the tax credit?
Your solar tax credit is claimed when you file your yearly federal tax return. It’s all based on the construction start date, not the completion date. That means, if construction starts by December 31, 2019, you can still claim the full 30% credit as long as the installation is finished by December 31, 2023* (if you work with us, it will be finished long, long before then!).
How to ensure construction starts this year?
Simple–contact us today! We start with a free quote and site assessment. We then work closely with you to ensure the solar system output and design fits your needs. Once that’s all squared away, we order product and begin construction. For most of our customers, this process takes just 90 days so you’re sure to get in under the 2019 deadline if you contact us today!
The sun is setting on solar incentives, so don’t wait another day! Get a hold of us now so you’re not left in the dark!
*Depends on location. Check with your local state and county for eligibility.