Fossil fuels supply about 80 percent of the world’s energy. However, it doesn’t come without drawbacks.
For one thing, they release harmful chemicals into the air when burned, which contributes to global warming. Not only that, but they’re unsustainable.
Fortunately, there are renewable alternatives such as solar power. A free source of energy, it’s both sustainable and inexhaustible.
Thinking of installing some panels on your house? Want to learn more about the solar panel tax credit? If so, you’re at the right place.
Keep reading for everything that you need to know about the topic!
What Are Solar Panels?
Solar panels, also known as “PV panels”, are used to collect energy from the sun. More specifically, they convert solar energy into electrical energy, which can then be used to power homes.
Currently, there are three main types—monocrystalline, polycrystalline, and thin-film panels.
What’s the Average Cost of Solar Panels?
Solar panels can cost anywhere from $15,000 to $20,000 (including installation). At the end of the day, it depends on various factors such as the system size and quality.
Labor costs can also differ depending on your location. To get the best deal, make sure that you get quotes from multiple companies.
Not only that, but the type of roof that you have can influence the cost as well. For example, you might not be able to accommodate larger solar panel arrays if your roof is small, which will end up costing you more.
For those who are interested, here are some more solar tips from aesinspect.com.
What is the Solar Panel Tax Credit?
The solar tax credit, also known as the investment tax credit (ITC), is a dollar-for-dollar reduction for anyone who purchases a solar panel system for residential or business use.
More specifically, it’s a 26% tax credit that can be claimed on federal income tax.
Keep in mind, however, that it’s a tax credit, not a rebate. In other words, you won’t get any money if you owe no tax.
Note: The tax credit will remain at 26 percent for projects that begin construction in 2021 and 2022. The rate will then decrease to 22 percent in 2023.
Other Solar Incentives and Rebates
Some states offer additional incentives for installing a solar panel system. Take Massachusetts, for example, they offer a state tax credit of $1,000 or 15% (whichever is less) for qualifying project costs.
Aside from that, you may be able to take advantage of cash rebates from your municipality or utility company, which can reduce the costs by up to 20 percent.
Keep in mind, however, that they’re usually only available for a limited time.
Taking Advantage of the Solar Tax Credit
Solar panels can be expensive. The good news is that you can deduct a significant amount by taking advantage of the solar panel tax credit, which will make it much more affordable.
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