What is a Solar Tax Credit ?

Installing solar on your home gives a lot of benefits, which include a solar tax credit or investment tax credit (ITC). If you are a homeowner who is using solar energy, you can deduct 26% of the total cost of your solar installation from your federal taxes. This is from the Energy Policy Act of 2005 that aims to decrease the increasing problems about energy. It also aims to support the transition to renewable energy. The solar tax credit was set to expire in two years after it was implemented. However, due to the overwhelming support and great outcome, congress has extended the expiration several times.

Who is eligible for the solar tax credit?

Homeowners or commercial building owners who have the solar energy system can get this benefit. As long as you own the system and you are not renting it, you can file for this credit. If the solar energy system is not in your residence, you can still claim your solar tax credit by showing proof that you own the property.

How do I claim my credit?

You can claim your ITC when you file for your yearly federal taxes. Simply fill up the 5695 Residential Energy Credit form. If you need further instructions for the filing, check the IRS site for information. Ask Solar Mike are not tax experts, thus we are unable to give tax advice but you can definitely check with the local IRS office in your area.

Another option is to check this guide by the US Department of Energy for the common questions regarding ITC. The guide includes frequently asked questions about the ITC such as eligibility and inclusions. This will greatly help you in the process of claiming your credit.

Solar tax credit is just one of the many incentives you can get when you start using solar power. Aside from that you can generate passive income just by having solar and referring it to your family and friends. If you desire to take the next step in having a sustainable source of power, Ask Solar Mike is ready to assist you with your solar journey. Feel free to book an appointment to begin your solar breakthrough!

Originally published at https://blog.asksolarmike.com on June 17, 2021.

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