How to Get a Solar Tax Credit in 2020

Ok, the days of the 30 percent federal tax credit are officially over when it comes to installing a home solar system. But, that doesn’t mean that you should forget about purchasing a new system. In fact, there are still substantial savings to be had. In 2020, you can still obtain a 26 percent savings on purchase and installation costs.

Officially called the Residential Renewable Energy Tax Credit, this form of federal tax savings is an attractive way to still save on the cost of installing a home solar system. Here’s how to take advantage of this tax break.

Getting the Federal Tax Credit

To receive the Renewable Energy Tax Credit, you must subtract the credit amount from the total tax the IRS says you have to pay. And there’s no limit on the price of the system you choose to install. This is a different type of savings than a standard tax deduction which reduces the amount of income you pay taxes on. Instead, you get a dollar for dollar credit regardless of your tax rate. And if you can’t use all the credit in one year, you can carry it over for later years.

Qualifications

The entire bill for a qualified system, minus the sales tax. This includes solar panels, onsite preparation and installation, as well as piping or wiring to connect the system.
Can be purchased in cash or with a loan.
Solar roofing tiles, such as those manufactured by Tesla, are acceptable.
Solar must be installed in a property that you live in for at least part of the year.

Exceptions

Solar installed in an income property that you don’t live in.
A leased system
A system that is used to heat a swimming pool or hot tub.

Don’t Forget the State Tax Credit

Here, in Arizona, you also gain the added benefit of a state tax credit up to $1,000. For more details on state and federal tax credits, as well as discounts and rebates, contact Cool Blew Solar today!

FAQ's

Is Solar Energy Expensive?

The size of your panel installation and the needs of your home will affect your costs. The average net cost of a 5.69kW system is $13,838 cash after 30% rebate (according to solar-estimate.org). An average-sized system can cost up to $35,000. Larger installations will require more hardware, planning and construction time. This can further increase costs. While solar panels are expensive, they have many distinct benefits. Cool Blew Electric & Solar’s experts can assess your situation and goals and recommend a cost-effective system to meet your needs.

How Much Can I Save By Installing Solar Panels?

An average-sized system (5 kilowatts) can reduce up to 50% of your monthly electricity bill. A 5.69kW system would offset 100% of your energy usage if your typical monthly bill is $138. Over a period of 20 years, these savings can add up to $30,000, based on your location and energy usage.

How Long Would It Take to Recoup My Solar Investment by Solar Energy Savings?

With a 5.69kW Solar system you would recoup your savings in 7 years and 2 months but with continuous Utility increases every year your Return and Investment will be much sooner.

What is a Solar Lease Program?

The Solar Lease Program has been one the most popular option that homeowners have chosen over the years. Solar Lease programs gives homeowners the opportunity to take advantage and put Solar on their homes and a guaranteed savings from their Utility for little to no money out of pocket. Most Leases are 20 year power guarantee from the solar provider and includes fixed monthly payments, no repair cost, fully insured and warrantied for the life of the system.

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