Congress Votes to Extend 26% Solar Tax Credit Through 2022
Installing a solar power system is a significant investment, which is why it makes sense to take advantage of tax credits and rebates whenever possible. Families were rushing to complete their solar installation before the end of 2020 to benefit from the 26% federal tax credit that was set to expire on December 31, 2020.
Extended Tax Breaks for Homeowners
The good news: if you didn’t get it done in time, Congress extended these tax incentives, giving you more time to save thousands on solar installation. The original tax credit plan was scheduled to start phasing down this year. Now, the enhanced solar tax breaks extended the 26% available tax credit.
Under the new extension, this residential solar tax credit will remain at 26% for 2021 and 2022. It’s scheduled to drop to 22% in 2023.
How Do Solar Tax Credits Work?
This federal tax credit program is designed to incentivize homeowners to invest in clean energy. For example, if the installation of a solar power system for your home costs $40,000, then the 26% credit can save you $10,400 when you file your taxes. This credit is calculated off your income taxes dollar-for-dollar and can sometimes be paired with state incentives as well.
So, you will need to pay for the system upfront. But then you get a portion of your investment next year when it’s time to file your taxes. It makes sense to save thousands of dollars. Not only is the installation price lower than expected because of the rebate, but you can enjoy the ongoing benefits of free or cheap energy for the duration of the time that you are living in the home.
Is Solar Installation Right for You?
Are you on the fence about installing solar panels on your home? This tax break might be the incentive you need to move forward with the decision. Acting now could save you a lot of money on the installation of a new solar power system.
If you’d like more information, then talk to us at New Day Solar. We’ll answer your questions and offer a free consultation for every homeowner: (855) 444-6329.