Solar Nerd articles about: Taxes

If you installed a home solar system last year, this might be one of the few times when you’re eager to file your taxes. That’s because the tax credit is worth 30% of the total price of your home solar installation. Most home solar installations are between 4 kW and 10 kW in size. The national median price of an installation is $3.80 per watt, which means that most installations will cost at least $15,000 before incentives.

Homeowners who want to go solar are usually interested in helping the environment, but for many people the top reason for adding solar panels to their house is to save money. Fortunately, everyone in the United States can be eligible for a federal income tax credit, which is currently worth 30% of the total system costs. For example, if you have a solar system with an invoice price of $20,000, the credit can reduce the amount of federal income tax you owe by $6,000.

If you’re a homeowner who’s ever done a major home renovation, you’ll know that certain upgrades will mean an increase in property taxes. When you do a home renovation, in most municipalities this will involve getting permits for things like electrical, plumbing, or construction work. When property tax assessment time rolls around, the assessor’s office will typically review any permits for the property. If it looks like significant renovation work was done, your taxes could go up.

Big news! The Inflation Reduction Act has increased the federal tax credit for solar to 30% and extended it for another decade. That’s a big deal for anyone who wants to install solar on their home or business. Disclaimer: I'm a solar nerd, not a tax nerd. Please consult a tax professional for authoritative advice on this issue. This tax credit, often called the Solar Investment Tax Credit, gives homeowners and businesses a break on their federal taxes worth 30% of the gross price of a solar photovoltaic system.