For those looking to make the most of our Texas sunshine in McAllen, time is running out on getting the best federal solar tax credit for your solar energy system at home or for your business. The solar Investment Tax Credit (ITC) can help you reduce the cost of going solar, with a 26% deduction of the cost of your solar energy system on your federal taxes. But you’ll want to get started soon because this deal from the government is only available for two more years.
Here’s how it works
Purchase and install your solar energy system in 2021-2022 and claim the ITC solar tax credit when you file your federal taxes. The tax credit allows you to deduct 26% of the cost of your solar energy system.
Residential, commercial, industrial, utility-scale — any solar project that begin construction in 2021 and 2022 will still be able to receive a tax credit at 26%. However, the ITC rate will drop to 22% in 2023, and finally, the residential rate will drop to 0% in 2024, while the commercial and utility markets will sit at a permanent 10%. Going solar is always going to be good for business.
You can expect to get as much as $9,000 or more towards the cost of your solar energy system with the ITC. There is no cap on this amount, and it applies to both residential and commercial systems. For businesses looking to go solar, there couldn’t be a better time to begin the process and make sure you’re getting the max dollar for your tax credit.
However, the ITC only applies to the cost of your standard solar energy system, batteries not included. It is possible to have solar without battery storage, with a grid-tied solution that allows you to draw from the grid at night, and from your solar during the day. Your solar installer can help you determine the right level of battery storage needed for your home or business, but it will not be included in the tax credit amount.
You can also take advantage of the solar tax credit even if the panels aren’t installed on your primary home. If you own the home, and live there at least part of the year, you are eligible to claim the solar tax credit. If you rent or lease your solar panels, the solar tax credit is not available to you. It is, however, available to whoever has leased you the solar panels.
Saving with Solar
In the Rio Grande Valley, going solar already makes a lot of sense. With the solar tax credit, it can make you even more in savings. Talk to an expert about getting the right solar energy system for you in 2021 to make the most of these federal solar tax credits and be on your way to saving energy and money every month.