The price of a Shade Power solar pergola or ground-mount solar energy system is brought down significantly thanks to a federal incentive that allows taxpayers to claim a 26% credit on the expense of installation through the end of 2020. If the federal solar tax credit, also known as the investment tax credit (ITC), exceeds your tax liability, the excess amount is able to be carried forward to the next taxable year. The ITC is available to both homeowners and businesses and there is no cap on the amount.
Unfortunately, this tax credit will not be around much longer and will be decreasing over the next two years. The tax credit schedule according to the U.S. Department of Energy is as follows:
- 26% for systems placed in service 1/1/2020 through 12/31/2020
- 22% for systems placed in service 1/1/2021 through 12/31/2021
You will claim the solar tax credit when you file your yearly federal tax return so don’t forget to let your accountant know you have purchased a solar energy system in the past year.
The federal solar tax credit makes investing in a solar pergola or ground-mount solar energy system much more profitable for the homeowner. It effectively decreases the cost of the installation by 26% through the end of 2020. By decreasing the cost, means your installation will pay for itself that much faster. After that, all of the electricity savings just mean more money in your pocket as a homeowner or business owner. So, if you are thinking about investing in solar, now is the time to act in order to take advantage of the federal solar tax credit.