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The federal solar tax credit, more commonly known as the investment tax credit (ITC), is a credit that reduces the cost of a new solar array for residential and commercial installations by 30 percent. The average consumer will save over $5,000 on the cost of a new solar installation with the ITC and there is no cap on the credits value.
Congress extended the beneficial incentive in 2015, ensuring that the 30 percent tax credit will be available to consumers until 2019.
You are only eligible to receive the ITC if you own your solar system. So beware if you’ve ever thought about entering into a power purchase agreement (PPA) or solar lease. Under those contracts, you don’t own the solar and will not be eligible to receive the tax credit.
The tax credit is flexible. Even if you don’t have enough tax liability to use it all in one year, you can roll the credits over to future years as long as the incentive is still in effect.
Remember, the credit will not be available to you if you sign a lease or PPA with a national solar installer.
You can claim your ITC when you file your federal tax return. Let your tax professional know you’ve gone solar in the past year and they will make sure to apply the credit.
Massachusetts is home to some of the best solar incentives. In addition to the ITC, solar owners in the Bay State can receive a $1,000 state solar credit as well as Solar Renewable Energy Credits (SRECs). SRECs are ending soon so the time to act is now if you want to triple the savings.
Give Northeast Solar a call and we'll be happy to tell you about the numerous tax incentives and financing options available to you. 413-247-6045