Your Resource For Understanding What Is Meant By Free Solar Panels
The Federal 30% Tax Credit
This is personal tax credit directly reducing the amount of tax you owe.
Tax Credit Amount
30% of the total cost of a qualifying renewable energy system will be deducted from the amount of tax you owe. This includes site labor, preparation and or improvements needed to support the installed system. Any unused amount will roll over to the next tax year.
This tax credit was initially enacted by the Energy Policy Act of 2005. The program was initially intended for solar power systems but was extended in 2008 to cover a wider range of renewable energy systems. In addition the termination date was extended to Dec 31st 2016. Other modifications were the removal of a credit limit, as well as further broadening of the types of systems that are covered.
The tax credit now includes
- A Property powered by solar power
- Solar Water heating systems
- Fuel cell properties
- Small wind power systems
- Geothermal heat pumps
There are a few minor restrictions that do apply to wind and geothermal heat pumps, but for the most part, whatever the cost was for you to setup one of these renewable energy systems, you will receive a 30% credit to your tax liability at the end of the year. Any unused credit that was earned will carry over to the next year although we are not certain if this will carry over past the end date of the program. Again this is 30% of the total cost to you. If you have any other incentives available that will help you lower your out of pocket cost so you will have to apply these deductions before figuring the 30% tax credit that you will be claiming on your tax return. In states where you have no other incentives to work with this tax credit will be worth the most.