By now it’s no secret that switching to solar could be one of the must lucrative and beneficial investments you can make in your home. The amount of money you could save in both short term and over the life of your solar energy system is tremendous. And you’ll enjoy a cleaner and healthier environment. How does solar save you so much?
One of the largest ways is through tax benefits. Purchasing a qualifying solar energy system entitles you to a number of tax benefits on both the state and federal level. On this blog, we’ll take a look at three of these tax relief or tax credit programs that could be available and explain how each of them could help you save in the short or long term.
Federal Solar Tax Credit
If you’ve done any research into solar, you’ve probably heard about the federal solar tax credit. The solar tax credit is a program that was designed to kickstart the nation’s transition to solar offering homeowners the ability to write off up to 30 percent of the cost of their system installation as a tax credit. This program was lucrative for solar because there was no limit to the size of the installed solar system nor was there any maximum to the claimed amount, up to the 30 percent of the total cost of the solar energy system.
However, this benefit won’t be around much longer. While the program is still in full swing today, at the start of 2020 the sunset period begins. By 2022, the credit will disappear for residential installations entirely and be reduced to just 10% for all utility and commercial-scale projects. If you want to take advantage of this program, you need to sign up for your switch to solar before December 31st of this year.
Property Tax Exclusion
Are you concerned that adding a solar energy system will add substantial value to your property, and thus send your property tax burden surging upwards? With property tax exclusion granted to solar energy equipment, you won’t have to. With property tax exclusion, your solar panels and equipment will be excluded when calculating the value of your property for tax purposes. That means your property taxes will be based on a reduced value, and thus you’ll save on your tax burden in this way as well.
California’s property tax exemption applies to certain types of solar energy systems installed before December 31, 2004, after which point it’s expected that this opportunity will expire. If you want to take advantage of this benefit or have any questions regarding this program, we encourage you to talk to one of our solar experts to find out more about how you can maximize your savings.
Sales and Use Tax Exemption
Enacted in 2017, Assembly Bill 389 created an exemption from the sales and use tax for solar energy systems. This is a huge benefit when you consider how much you can save—with state sales tax being set at over 10 percent in some areas, this could save you thousands of dollars on the total cost of transitioning your home to solar energy. This program is set to expire on July 1, 2030 so you do have some time if you want to take advantage of this benefit. However, if you want to maximize your savings and take advantage of this program as well as the others listed here, you’ll want to reach out and get more information about switching as soon as possible.
For more information about switching your home to solar, pick up the phone and call the experts at Valley Heating, Cooling, Electrical and Solar at (408) 868-5500 today.
Elsewhere on our blog…
This month we took a look at two other common issues you could experience with your heating and cooling system. First, maintenance is something that’s both extremely important for your system and something that the majority of homeowners overlook. However, you can maximize your savings and how much it benefits you by scheduling your annual maintenance service at the right time. Believe it or not, there are times of the year that are ideal for having these important services done in order to benefit your system the most. Check out our blog to learn when those are and why you should set yourself a reminder to schedule your appointment around that time. See more here!
Also, with winter coming soon, we took a look at the important difference between heat pumps and furnaces. Many people mistakenly use these terms interchangeably, however, the way these two heat sources keep you warm are very different. And that’s important when the time comes to replace your heater and you’re considering an entirely new type of system entirely. In this post, we took a look at what the differences between these systems are, explained some pros and cons of each and offered some helpful advice so you could determine which of these options is right for you.