Solar Tax Credit
Why 2019 is the year to think wise and solarize to save big on your taxes.
In 2005, Congress passed the Energy Policy Act, a law that, among other things, allows a federal tax credit for up to 30 percent of the cost of a new solar energy system for a commercial or residential property, including installation fees. Originally set to expire in 2007, the credit now extends until 2021 for residential solar energy systems, with benefits for commercial solar energy systems continuing beyond 2022.
However, there’s a catch. Starting in 2020, the amount you can save on a newly installed solar energy system will decrease. This year is the last year you can get the full 30 percent federal tax credit. The percentage decreases year over year until 2022, when those with new residential solar energy systems get no federal tax credits at all. New commercial solar energy systems will get 10 percent.
Federal tax credit value per year for solar energy systems:
- 2019: 30 percent for new residential or commercial
- 2020: 26 percent for new residential or commercial
- 2021: 22 percent for new residential or commercial
- 2022 and on: 0 percent for new residential, 10 percent for new commercial
If you’re thinking about getting a solar energy system for your home or commercial property, 2019 is the year to do it.