There are several available federal and local incentives that assist with the cost of switching to solar energy.
Many homeowners qualify for a Solar Investment Tax Credit while utility companies also offer Renewable Energy rebate programs.
Solar panel companies like Central Texas Solar can help!
A tax credit is a dollar-for-dollar reduction in the amount of income tax you would otherwise owe. For example, claiming a $1,000 federal tax credit reduces your federal income taxes due by $1,000. The federal tax credit is sometimes referred to as an Investment Tax Credit, or ITC, though is different from the ITC offered to businesses that own solar systems.
What is the federal solar tax credit?
The federal residential solar energy credit is a tax credit that can be claimed on federal income taxes for a percentage of the cost of a solar photovoltaic (PV) system. (Other types of renewable energy are also eligible for similar credits but are beyond the scope of this guidance.)
In December 2020, Congress passed an extension of the ITC, which provides a 26% tax credit for systems installed in 2020-2022, and 22% for systems installed in 2023. (Systems installed before December 31, 2019 were eligible for a 30% tax credit.) The tax credit expires starting in 2024 unless Congress renews it.
Am I eligible to claim the federal solar tax credit?
You might be eligible for this tax credit if you meet all of the following criteria:
Your solar PV system was installed between January 1, 2006, and December 31, 2023.
The solar PV system is located at your primary or secondary residence in the United States, or for an off-site community solar project, if the electricity generated is credited against, and does not exceed, your home’s electricity consumption. The IRS has permitted a taxpayer to claim a section 25D tax credit for purchase of a portion of a community solar project.
You own the solar PV system (i.e., you purchased it with cash or through financing but you are neither leasing nor are in an arrangement to purchase electricity generated by a system you do not own).
The solar PV system is new or being used for the first time. The credit can only be claimed on the “original installation” of the solar equipment.
What expenses are included?
The following expenses are included:
Solar PV panels or PV cells used to power an attic fan (but not the fan itself)
Contractor labor costs for onsite preparation, assembly, or original installation, including permitting fees, inspection costs, and developer fees
Balance-of-system equipment, including wiring, inverters, and mounting equipment
Energy storage devices that are charged exclusively by the associated solar PV panels, even if the storage is placed in service in a subsequent tax year to when the solar energy system is installed (however, the energy storage devices are still subject to the installation date requirements)
Sales taxes on eligible expenses
Local programs offer financial incentives that help offset the initial cost of installing a solar energy system. By installing solar on your home or business, you can generate a portion of your own electricity & help the environment.
CPS Energy has a Solar Rebate Program in place for homeowners in the service area. As a registered contractor Central Texas Solar will submit all the necessary documentation to apply for the program and ensure a smooth process.
The AEP SMART Source Solar PV Program is designed to help customers of AEP Texas meet a portion of their energy needs with solar electric systems. The residential rebate value is $0.50 per watt, up to a $5,000 limit. The commercial rebate is $0.50 per watt up to 25 kW and $0.25 per watt for any capacity exceeding 25 kW.