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Sunset behind home with new solar array

Solar Tax Credit Sunset

Solar in Ohio

2020 has been quite the unexpected year. And, believe it or not, the end of 2020 is quickly approaching. As we enter the last quarter of the year, we want to remind you that 2020 is the last year to claim the 26% federal tax credit. While the change from the 26% to the 22% in 2021 federal tax credit sure seems like a big drop, the federal tax credit for solar will sunset and drop down to ZERO in 2022. And that’s a really… big… drop.

There are a few points of confusion that we hear a lot from those curious about solar right now. We truly believe the time to act is now in Ohio if you’re:

  • Considering making an investment in your property by adding solar
  • If you’re planning on expanding your solar array to accommodate increased energy needs in this “new normal” & we’re all at home a little more.

If you fall into either category, keep reading to find answers to those solar questions.

Solar Investment Tax Credit

  1. The step down – The biggest incentive out there today, the Solar Tax Credit decreased from 30% to 26% in 2020. It will step down just once more to 22% in 2021 before dropping to 0% permanently for residential solar installations.
  2. Getting the timing right – If the price you are quoted includes the 26% federal tax credit, that means that the system will need to be physically installed this year for you to take that tax credit.
  3. Adding Batteries and/or Expanding – solar battery storage and expansion solar systems are eligible for the tax credit. The advancements in technology and the availability of batteries in Ohio make adding battery storage enticing to homeowners. Tesla Powerwall batteries are the #1 choice with many of our current customers, though Third Sun offers various battery options.
  4. Auxiliary Costs + Claims – The current tax code allows for the cost of system expansion, but not the cost of routine maintenance. De-installing and re-installing solar for a re-roofing project are ineligible costs for the Federal Tax Credit. Additionally, the –re-roof itself is also ineligible for this tax credit.

Preparing for Solar in 2021

2021 is the final year of the Solar Investment Tax Credit. In Ohio, we are anticipating a very busy 2021. If you know that this year is too soon for solar, start making plans for next year. Do you know if you’re eligible to take the solar tax credit? If not, find out! Talk with your tax professional to see if there is a way for you to structure your taxes to take the 22% solar tax credit. The Solar Investment Tax Credit is the largest solar incentive we’ve seen in Ohio. And we know lots of Ohioans won’t want to leave that on the table.

Simple supply and demand tells us that the solar market will be in a frenzy next year. Between equipment availability and installation capacity – we are planning for a busy year.

If you already have a 2021 solar installation in mind, we recommend reaching out to start your process now. We anticipate a large rush and installation wait times to go up as we move into 2021.

As you make the important decision to go solar, remember to consider the quality, ethics & longevity of your solar partner. Choose an installer you trust.

  • Get A Solar Evaluation

Home with REC Solar Panels in Avon Ohio

Invest at Home: How to Maximize Savings with the Solar Tax Credit  

Timing is everything when you’re thinking of purchasing a solar system for your home. It may sound like a great marketing pitch but, hey, it’s true. If you want to get the most savings on your solar install… now is the time to start exploring your options. The biggest incentive out there today, the Solar Tax Credit, or Investment Tax Credit decreased from 30% to 26% in 2020. It will step down just once more (to 22% in 2021) before dropping to 0% permanently for residential solar installations (a 10% solar tax credit will remain for commercial solar systems).  

Solar Tax Credit – How does it work? 

The solar tax credit is applied to your federal income taxes as a credit, and it reduces (or eliminates) what you owe. It’s not a refund or a deduction. Anyone who purchases a solar installation on their home or business is eligible to claim the tax credit. However, you must have a tax liability to claim the credit. You can claim the credit over more than one year. In doing this you carry any leftover amount forward into the next year.  

If you have any questions or need more clarity, our Solar Consultants are ready to chat with you about the solar tax credit. As you likely assumed, we are not tax experts, so we will ask you to reach out to your tax professional for any questions related to your specific tax liability.  

Too early? Think again! 

To claim the 26% tax credit, you must act quickly as our end of the year queue is filling up! If you purchase a residential solar system in 2020 and it is installed in 2021, you would only be eligible to take that year’s tax credit (22%). So, your system needs to be installed in 2020 to be eligible to claim the full 26%. (Heads up for business owners: the rules are slightly different here for commercial projects).  

Ohio Incentives & Additional Offers? 

Unfortunately, there are no statewide or local solar incentives available in Ohio. Loan options vary from solar company to company. Various finance partners have different programs and different rates (and different hidden fees baked into the price). Most solar installers in Ohio offer $0 down loans. Like them, we can offer you zero money down with any of our term loans. This is a great option for those that want to go solar but don’t want to tap into home equity or savings. 

 

  • Get A Solar Evaluation