In a scenario that almost seems too good to be true, the U.S. government is offering significant tax credits that can help you upgrade your home energy system to include the latest solar tech.
It's the result of ambitious programs to curb planet-warming air pollution. And if you take advantage of the right opportunities, you could save impressive amounts of cash.
What's the opportunity?
The Inflation Reduction Act of 2022 has led to billions of dollars in investments in clean energy projects, according to the government. These include steep tax discounts — dollar-for-dollar rebates that limit your income tax burden.
Federal offerings include the Residential Clean Energy Credit, which ensures the continuation of a tax rebate that covers up to 30% of the cost to install a rooftop solar system. Battery storage is now part of the program, as well. It's available through 2034.
The discount starts to diminish within a decade, so now is a good time to investigate your options.
Tax breaks "will decrease to 26% for systems installed in 2033 and to 22% for systems installed in 2034. The tax credit expires starting in 2035 unless Congress renews it," per the Energy Department.
The government is also highly incentivizing companies to develop renewable projects, including solar, in low-income communities. The steep tax credits are meant to expand accessibility.
What are some of the options?
Solar energy accounted for 3.9% of utility-scale U.S. electricity generation in 2023, but the number is expected to grow. Innovations are becoming impressive, creating options for homeowners hesitant to install a rooftop panel system. Solar shingles, for example, look like traditional roof coverings, but are effective energy makers. Tesla and other companies have versions, some that are even nailable.
Adding solar panels can be a real budget-booster, saving about $1,500 a year if canceling out $125 per month on your electric bill. Average total federal tax benefits on the installation add up to $4,600.
A White House fact sheet offers some examples about how incentives can benefit families. In one scenario, a family of four with a household income of $250,000, can save 30% through tax credits to install solar panels. Savings can be realized for just about any household size and income.
It's also worth exploring state incentives that may provide savings on top of the federal programs.
Community solar is another option that allows you to tap power from solar farms, without installing tech at home. You can save up to $150 a year on electricity bills, on average and depending on your location, by using this option.
How to take action
Some quick online research can get you started.
Energy information companies such as SaveOnEnergy can help you navigate the various programs by getting quotes for products, and from installers. The online service will even connect you with them after selecting the best option. From homes, to condos, or apartments, the free service can be a vital tool.
How do solar incentives help the planet?
Renewable solar energy directly reduces the amount of fossil-burning power that needs to be produced, limiting the creation of harmful heat-trapping air pollution linked by experts to health problems and increased severe weather risks.
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