Considering that the cost of solar power has fallen roughly 70% over the last ten years, now is a great time to look into purchasing a solar system for your home.
Along with the added benefit of federal and state solar incentives, you could see the price of your new solar panel installation drop significantly. Not to mention the added manufacturer benefits and utility credits you can earn while producing solar energy.
Keep reading to learn more about the different types of solar incentives available.
Available Solar Incentives for 2022
Several types of solar incentives exist for both residential and commercial solar applications across the country. Here are the most common solar incentives used by residential homeowners to reduce their solar panel costs.
Federal Solar Tax Credit
The solar investment tax credit is a federal solar tax credit offered to new solar panel system owners. This solar incentive provides a tax credit of 26% of the total cost paid for the solar system installation for United States citizens.
This solar incentive will taper down to 22% in 2023. After that, it will be established at 10% for commercial applications permanently. Residential applications will not receive the credit as of January 2024.
State Solar Tax Credit
Each state will offer additional solar incentive tax credits. As a result, new solar installations within these states will earn money back on their state income tax bill. This credit will be offered the following year, after installation.
This solar tax credit can be claimed along with the federal tax credit, too.
Solar Panel Rebates
Don’t be afraid to check with your utility company and solar panel manufacturers to understand solar panel rebates. These rebates can almost immediately reduce the cost of installation. They are provided through direct payment to the installers, which can save you money on the installation.
Solar Energy Net Metering
The most important way that you save money with solar panels is through net metering. Every kilowatt-hour of electricity your panels produce reduces your electrical consumption with your local utility company. That equates to a lower utility bill at the end of every month.
Performance-based incentives (PBIs)
If you produce more kilowatt-hours than you are using, your utility company may provide you with green energy credits. They may even provide you with a direct payment through your utility bill.
This performance-based incentive can allow you to build up green energy credits that pay for future utility bills.
Receive the Benefits of Solar Tax Credits
There are many solar incentives to consider, but you can take advantage of every single one of them if you decide to. Remember that some solar incentives like the Federal Credit are time-sensitive. They will expire for residential applications in the new year 2024.
Other solar incentives such as net metering and PBIs are still being updated and improved upon. Ask your local utility company or state regulatory agency for more information.
Let us know if you enjoyed this article, and keep reading our blog for more information about home energy savings.