Posted by Todd Filbrun on Tue, Feb 19, 2013 @ 09:00 AM
The tax benefits of solar energy are just one reason that this industry has grown exponentially in the past few years. As the price of solar panels is dropping, homeowners and business owners can now save even more through government and state tax programs designed to encourage new investments in solar.
If you are considering investing in alternative sources of electricity, don't forget to factor in these four tax benefits of solar energy:
- Federal tax credits - The federal government's residential renewable energy tax credit program allows you to claim 30% of the total cost of a new solar power system. There is no cap to the amount of credit you can get and if you have an excess credit in one year it can typically be carried over to the next. This tax credit can be applied to both existing homes and new construction, but is not applicable to rental homes or non-primary residences.
- Corporate tax benefits - If you own a business that has installed a solar energy system you may be eligible for accelerated depreciation allowing for even more savings on your solar system.
- Solar rebates - If you participate in a local rebate program with your utility company, the rebates are not considered taxable income by the Federal Government. However, we recommend that you always consult your tax professional if you have any questions related to taxable income.
- California property tax incentive - Qualifying solar energy systems in California are eligible for a property tax exclusion of 100% of the value of the system.
In addition to these valuable tax incentives, additional benefits of solar energy include rebates from utility companies, expedited permitting, permit fee waivers, and favorable financing solutions. For a complete list of the solar incentives available in California, refer to the DSIRE database for more information.
How much do you think you could save by taking advantage of the tax benefits of solar energy?