Homeowners or businesses that install qualifying solar energy systems are eligible for a federal tax credit that can mean substantial savings on their tax bills.
The tax credit is for 30 percent of the cost of the system. The advantage of a tax credit is that it is subtracted from your total tax liability, as opposed to a tax deduction, which only reduces the amount of your income before the tax is Computed.
A photovoltaic system must provide electricity for the residence and meet applicable fire and electrical code requirements.
To qualify, taxpayers need to have the following documentation:
When a solar system generates savings for a homeowner its yield is not taxable. Typically, a solar system will provide a ten to fifteen percent return per year. More specifically, a ten percent yield from solar equals at least fifteen percent before taxes.
There is a big difference between placing the same money into a stock, bond or CD and going solar to avoid a high utility expense. While the traditional avenues of investment are available to us as options, we really have no choice about our utility bills.
If you generate more power than you use from the electric company in a given month, you will see a credit applied to your bill. At the end of a year, if you have a surplus of energy, you may be paid in cash, at a wholesale rate, per kilowatt hour. What this means is that the utility will pay you what it costs to generate the power, and not the end-user mark-up.
The people who have already installed these types of systems are really enjoying no utility bills, or depending where they live, the check they get from the utility company.
What would you do with an extra $20K? That’s how much the average solar system will save you over 20 years. Residents in some states with high electricity prices can expect to save much more than that – consider Hawaii, where residents save on average $64,000 after 20 years
The long-term trend for electricity prices is UP! Over the past 20 years, electricity prices have risen between 2.5% and 7% every year
The price you pay after going Solar will never inflate in comparison to the cost of Electricity over a period of 5 – 20 years!