Federal Solar Tax Credit Gets a Major Boost with the Inflation Reduction Act of 2022: What it Means for Homeowners and the Solar Energy Industry in the US
How the Inflation Reduction Act of 2022 Extends the Federal Solar Tax Credit
If you’re a homeowner thinking about installing solar panels, you’ll be glad to know that the federal solar tax credit, also known as the federal solar investment tax credit, has been extended by the Inflation Reduction Act of 2022. The tax credit has been increased to 30%, making renewable energy an even more appealing investment option. But how exactly does it work?
Understanding the Federal Solar Tax Credit
The federal solar tax credit allows homeowners to claim back 30% of the cost of installing a solar power system. It is important to note that this credit is not a tax refund; if you do not pay income taxes, you will not receive any money from the federal government. However, if you have a tax liability, you can use the credit to offset it.
Carrying Forward the Tax Credit
What if the cost of installing solar panels exceeds your tax liability? You can carry forward the tax credit for several years under the new rules, allowing you to claim the remaining credit in subsequent years. It’s also worth noting that if you overpay your taxes throughout the year, you may receive a check back, which could be used to cover the cost of your solar installation.
The Federal Solar Tax Credit and Battery Storage
If you want to add battery storage to your solar power system, you’ll be happy to know that the cost of battery storage is also eligible for the federal solar tax credit. This makes it an even more appealing option for those seeking to invest in renewable energy while lowering their carbon footprint.
Taking Advantage of the Federal Solar Tax Credit
If you want to take advantage of the federal solar tax credit, you must act quickly because it will begin to phase out after 2023 and will be completely gone by 2033. However, because installing solar panels can be a significant investment, it’s critical to ensure that you’re getting the best deal possible. Skootle Solar will assist you in getting the best system possible at the best rate. Fill out our request for a quote to get started
Conclusion
The extension of the federal solar tax credit under the Inflation Reduction Act of 2022 is fantastic news for homeowners considering solar panel installation. There has never been a better time to invest in renewable energy, with the tax credit now increased to 30% and the cost of battery storage also eligible for the credit. Just keep in mind that the credit will be phased out soon.