As we discussed earlier this month in our blog, 2019 is going to be a big year for solar. If you’re a Massachusetts homeowner or business, who has been considering making the switch to renewable solar energy, this is the year to finally install those solar panels.
You may remember our mention of the Federal Solar Investment Tax Credit (ITC) and how 2019 marks the year to take advantage of the maximum benefits it offers. We often get questions about this valuable tax incentive, so we’re taking a moment to explain how Massachusetts homeowners and business owners can take advantage of the solar tax credit before it’s too late.
The Federal Solar Tax Credit: What You Should Know
The Solar Investment Tax Credit, also known as the federal solar tax credit, was last extended back in 2015 to give more Americans access to the valuable benefits of clean solar energy. Through this tax credit, home and business owners who install a residential or commercial system can deduct 30% of the cost of their system from what they owe in federal taxes.
Now that it’s 2019, we’re looking at the final year during which you can still receive the maximum incentives when you invest in solar. After this year, the incentive will start to decline before it's completely phased out for residential solar in 2022. Here’s what the current timeline looks like for the federal solar tax credit:
2019: Tax credit remains at 30% for residential and commercial systems
2020: Tax credit reduced to 26% for residential and commercial systems
2021: Tax credit reduced to 22% for residential and commercial systems
2022 onwards: Tax credit reduced to 10% for commercial systems while residential systems no longer earn an incentive
Install Solar in 2019 for Maximum ROI
For a maximum return on your solar investment, it makes sense to schedule your solar PV system installation for this year to take advantage of the full incentive.
Let’s say you’re a homeowner who is planning to install a system which costs $20,000. After the 30% federal tax credit, the net system cost would be just $14,000 (and that’s without taking statewide SMART incentives into account!) If, on the other hand, you were to install your system next year in 2020 and thus receive only a 26% tax credit, the net system cost would be higher — $14,800.
Why wait to install your system when you could earn more money in federal tax incentives and start enjoying the economic benefits of solar sooner?
How to Claim the Federal Solar Tax Credit on Your Taxes
The most important things to know about claiming the federal solar tax credit are:
1) Keep all receipts related to your solar installation project
2) Obtain and fill out an IRS Form 5695.
3) Add your renewable energy credit information to your typical IRS Form 1040.
Taking advantage of the federal solar tax credit is simple, especially with a solar contractor like Boston Solar at your side. As the #1 residential solar installer based in Massachusetts, we’ve helped homeowners all across the Bay State from the south shore to the north shore and from Cape Cod out to the Pioneer Valley understand how to take advantage of this valuable tax incentive.
Schedule your solar electric system installation while the max 30% tax credit incentive is still in effect! Call 617-858-1645 or contact us to begin your solar project with a free quote.