The Solar Investment Tax Credit is the single largest incentive for going solar in 2019, and this is the year to move forward to maximize savings.
DENVER (PRWEB) September 12, 2019
In 2018 Colorado’s Solar Energy installations grew by over 19% and moved into the 11th spot for over all installations by state. This is great news for homeowners looking to go Solar. As the industry continues to grow in Colorado, so do local companies working to bring the benefits of going Solar to home and business owners alike. One of the best reasons to go Solar now is the step down of the Solar Tax Credit happening at the end of 2019.
The Solar Investment Tax Credit is the single largest incentive for going solar in 2019, and this is the year to move forward to maximize savings. As we come to the close of 2019, a lot of homeowners have questions about the Solar Tax Credit and how it could affect them.
The Investment Tax Credit (ITC) is currently a 30 percent federal tax credit claimed against the tax liability of residential solar purchases (Section 25D). The ITC allows the homeowner to apply the credit to his/her personal income taxes. This credit is used when homeowners purchase solar systems outright and have them installed on their homes.
A tax credit is a dollar-for-dollar reduction in the income taxes that a person or company claiming the credit would otherwise pay the federal government. The ITC is based on the amount of investment in solar property. Both the residential and commercial ITC are equal to 30 percent of the basis that is invested in the eligible property.
The Solar Tax Credit will step down from 30% which could end up costing you thousands in lost credit. The Investment Tax Credit is applied to your array's total purchase price, so the amount your receive is dependent on the amount your system costs. The drop in the ITC could add up to thousands of dollars. To be on the safe side, your solar project should be fully installed in 2019 to be absolutely certain that you can claim the Tax Credit on your 2019 taxes. To be 100% sure that you can claim the 30% ITC, the sooner you move forward, the better. Even though installing a solar system does not usually take more than a day, many homeowners do not realize that a solar project may take weeks to complete after the contract signing. This is due to factors such as permitting, financing approval, utility approval, and so on. Starting your project early will eliminate any potential stress on completion.
The ITC then steps down to 26 percent in 2020 and 22 percent in 2021. After 2023, the residential credit will drop to zero while the commercial and utility credit will drop to a permanent 10 percent.