The investment tax credit for solar panels expires in 2024 unless Congress renews it, so now is the time to install solar panels.
Solar panels not only save money, but they are a conscientious choice. Homeowners and business owners can feel good about investing in solar power. Considering that the planet has already surpassed its carbon threshold, solar panels are an investment that could help save the world.
Of course, there are some startup costs to set up solar power. To find out exactly how much, check out the information below.
The Cost to Install Solar Panels
There is a cost to solar panel installation, but the energy savings should not make it prohibitive. Homeowners from states with expensive energy bills will benefit the most from solar power. Let’s break down the costs.
Calculate Energy Usage
Your monthly electric bill should easily sum up your electricity usage. Keep a few of these bills to get an idea of your average energy usage, particularly in different seasons. Hot climates like those in Arizona and California drive up the average energy usage in those regions.
Your energy use will determine what kind of solar panel system you need, affecting the cost. There is a dollar amount associated with the number of wattages needed.
Apply the Federal Tax Credit
The investment tax credit began in 2005 and was regularly renewed by Congress. Recently extensions were passed so that homeowners who buy and begin their solar projects before 2023 will be able to get a 26% tax credit for the cost. In 2023, it is reduced to 22%. In 2024 the tax credit will expire entirely unless renewed by Congress.
This credit is not a refund. It will reduce the tax liability of the person or organization that applies for it.
Check for State Credits
There are about 20 states that offer some kind of tax incentive for solar panel installation. This may include something like a tax credit, a sales tax exemption, a cash incentive, rebates, or a property tax exemption.
Other Incentives
Thanks to the progress made by the renewable energy industry, there are even more incentives offered in certain areas. This may include an agreement with the local utility company to pay you for the electricity your solar panel system generates for the grid.
The best solar panel company in your area should be able to provide you with a list of incentives in your region. These incentives significantly reduce the cost of purchase and installation, as well as amplifying your savings.
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Is it worth it to install solar panels? Usually, it is. It not only benefits the homeowner’s wallet, but it benefits the world. Additionally, a solar panel is a sturdy system designed to last years with little maintenance. That fact, combined with various other incentives, more than makes up for the initial costs.
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