Accountants and tax professionals often prefer the Investment Tax Credit (ITC) due to its lack of cap on value. However, it is essential to note that this nonrefundable credit will only benefit those who have sufficient income.
Solar power is a great way to save money and protect the environment at once. The benefits of solar power are many, including the federal tax credit for home and business owners who had panels installed before December 31. This article will learn everything that tax professionals need to know about this credit.
The Federal Solar Tax Credit (formally called) has been a popular incentive for years. It was first passed as part of 2005’s Energy Policy Act and extended multiple times since then, most recently in 2018 with extensions until 2022 when it will be at 26%. This is quite a significant tax credit because it allows eligible taxpayers to reduce their income taxes by $1 for every dollar they earn.
Homeowners can earn Solar Renewable Energy Certificates (SRECS) by generating and selling the electricity they produce at home through on-site installations or Solar community gardens. These credits allow them flexibility in using power while also helping keep rates down. This is an exciting opportunity when people are looking for ways to be more independent from their utility companies.
The government is so enthusiastic about solar power that it has offered many other states and municipalities property tax exemptions for installing panels on homes or businesses. Homeowners and companies alike will enjoy an added benefit from solar panel installation as it is not included in property tax fees.
The U.S Department Of Agriculture’s (USDA) Rural Energy America Program offers grants and loans for small businesses in rural areas with populations 50,000 or less. Those looking to go solar can apply, receiving gifts up through 25%. For larger projects that are not eligible under this grant program or others like it, they may be able to get funding from Guaranteed Loans at 75%.
How Does It Work?
The latest generation of solar power panels helps homeowners and businesses save money on their electric bills and can empower them through selling excess energy. But the benefits don’t stop there! With solar power panels on your roof, you can be energy certified and avoid power outages.
With the help of solar panels, homeowners can get rid of their electric bills and carbon footprint. Once you pay off your installation cost through payments or savings on electricity bills over time- it’s free for use! The more sunny days we have each year means that these renewable energy sources will work all day long, even if there are rain or dark skies.
Homeowners who have solar panels on their homes benefit from monthly credits that allow them to draw additional energy from the grid as a compensation when necessary. Not everyone will want or need their excess energy back from the grid, for those who don’t mind storing some of your power needs in a battery that can charge during outages at home.
The future is bright for those who install solar power! It’s never too late or early to take advantage of these credits. As a tax professional, if your clients installed solar power any time between January 1 and December 31, 2020, they may be eligible for some significant tax credits. You must make sure your clients know all the credits available to them.
Your expertise will help your clients determine how to protect and grow their savings created by this eco-friendly technology.