2024 Solar Tax Credits: A Powerful Stimulus for Going Solar
The federal solar tax credit is a lot better than ever thanks to the Inflation Reduction Act of 2022, which dramatically extended and expanded this popular clean energy incentive. What You Should Know About the solar tax credit in 2024 Solar tax credits 2024
In 2024: Federal Solar Tax Credit
The federal solar tax credit (Investment Tax Credit or ITC) is a dollar-for-dollar tax deduction on the cost of your solar energy system. It allows you to deduct a percentage from your federal income taxes based on the installation costs of your residen
tial system
The federal solar tax credit is 30% of the cost of your solar energy system for 2024* *
What is the Solar Tax Credit and How Does It Work?
For example, you purchase a solar energy system on your house for $20,000. That means a federal income tax credit of $6,000 — which you can use to offset up to 30% of your federal income taxes.
Disclaimer: This is tax credit is non-refundable, so you can only take it up to the amount of tax you need to pay. Credit not used to offset tax may be carried forward to succeeding years.
State and Local Incentives[edit]
There are also numerous state and local incentives (in addition to the federal tax credit) that you may want to take advantage of, including:
State Tax Credits:** Only if you pay tax in a state that gives tax credits for solar energy systems.
Asset Tax Exemptions: In some states, solar may be excluded from property taxes.
Retroactively apply to the past five years of taxes paid on eligible property. Sales Tax ExemptionsIn some states solar equipment is exempt from sales tax.
Incentives and Rebates * Several utilities provide cash rebates for the installation of your solar panels.
⭐ Net Metering Programs – Allows you to sell excess solar energy back to the grid, reducing your energy costs.
Make Finding Specific Incentives in Your Area Easier — To do so you can:
Talk to a Solar Installer:** Many solar installers are acutely aware of local, state and federal incentives.
*Contact your utility company — Your utility company may have some rebates
Research Online: Websites like the Database of State Incentives for Renewables & Efficiency (DSIRE) provide detailed information on incentives by state.
Contact Your Local Government: Local government offices can provide information on any specific incentives or programs.
By taking advantage of these incentives, you can significantly reduce the upfront cost of going solar and enjoy the long-term benefits of clean, renewable energy.
Remember to consult with a tax professional to ensure you maximize your tax savings.
Would you like to know more about specific state or local incentives, or perhaps about the process of claiming the federal solar tax credit?