The Federal Solar Tax Credit Returns To 30% And Has Been Extended For Ten Years Under The Inflation Reduction Act!
Congress passed the new climate and inflation reduction bill, a massive benefit to Maine home and business owners considering installing a solar electric system. The Inflation Reduction Act will make going solar more affordable thanks to its long-term solar and battery tax incentives, which include:
- Solar Investment Tax Credit Returns To 30%
The Solar Tax Credit has been instrumental in making solar affordable to homeowners and businesses. This new legislation returns the available tax credit to 30%! Previously the residential tax credit was slated to drop from 26% in 2022 to 22% in 2023 and expire in 2024.
- Solar Tax Credit Extended For 10 Years
In addition to returning the solar panel tax credit to 30%, the tax credit has been extended for ten years. Under this new legislation, the 30% federal tax credit will run for ten years until it is scheduled to decrease to 26% in 2033 and 22% in 2034. It is currently scheduled to expire in 2035.
- Systems Installed In 2022 Will Qualify For The Newly Enacted 30% Tax Credit.
The 30% credit will be retroactively applied to anyone who installed their system since the beginning of 2022.
- The 30% Credit Also Applies To Battery Backup Systems.
- Effective in 2022, batteries installed with a solar electric system will qualify for the 30% tax credit.
- Starting in 2023, standalone battery systems (those installed without solar electric systems) will also qualify for a 30% tax credit.
Battery systems let homeowners store excess solar energy generated during the day and use it at night to avoid high utility electricity rates. Batteries can also help keep lights and appliances on during blackouts and power outages. With more extreme weather events threatening grid reliability and increasing the risk of power outages, many of our customers are adding batteries such as the Tesla Powerwall to their solar electric systems.
How The Federal Solar Tax Credit Works
Solar Electric systems qualify for a 30% Federal Tax Credit. This tax credit can reduce your federal tax liability and is applied when you file your taxes. Solar electric customers purchase the system at the full price, earn a 30% tax credit, and apply it to their tax liability when they file taxes (read our Solar Tax FAQS here to learn more). Maine Solar Solutions does not provide tax advice. Please check with a qualified tax professional to determine your eligibility.
Going Solar In 2023
Now is the time to act if you are considering installing solar in 2023! An increasing number of Maine homeowners are fixing their cost of electricity and seeing a great return on investment by investing in solar electric systems. And with more Maine homeowners converting their homes from fossil fuels to efficient electric heatpumps and heatpump hot water heaters, investing in a solar electric system has proven to be a great way to eliminate the impact of ever-increasing energy costs. As a result, Maine Solar Solutions has seen the demand for solar steadily increase these past few years, and we expect next year to have even higher demand as utility prices continue to climb.
Ready For The Next Step?
Ready to see what solar could look like for your home and how much you could save by owning your power? Reach out for a free customized system design and informative quote. As always, our goal is to get you the information you need to make an informed decision.
* This guide provides an overview of the federal investment tax credit for those interested in residential solar photovoltaics, or PV. Maine Solar Solutions does not provide professional tax advice or financial guidance. Please consult with a tax professional.