Solar Panels
Maximize Your Solar Investment
Embracing solar energy is not just an eco-friendly decision; it’s financially savvy too, thanks to a range of incentives and rebates designed to make solar more accessible. At MD Advanced Electric, we’re committed to helping you navigate these opportunities to maximize your solar investment.
Types of Solar Incentives
1. Federal Solar Tax Credit
A significant incentive comes from the federal government in the form of the Investment Tax Credit (ITC). This program offers a 30% tax credit on the total cost of your solar system, including solar panel batteries. It’s available to both homeowners and business owners, making it an excellent opportunity to reduce initial solar installation costs.
The Federal Solar Investment Tax Credit, now known as the Residential Clean Energy Credit, offers a 30% tax credit on the total cost of a solar photovoltaic (PV) system, including solar panel batteries. It’s available for both residential homeowners and commercial businesses.
This tax credit was renewed and extended in August 2022 as part of the Inflation Reduction Act, raising the rate from 26% to 30%. It will be available at this level until the end of 2032 and is retroactive to include systems activated since January 1, 2022.
You can claim up to 30% of your solar system’s cost as a credit, which can lower the federal taxes you owe. For example, a $30,000 solar system could yield a $9,000 tax credit. If the credit exceeds what you owe, the remainder can be carried over to the next tax year.
The credit covers up to 30% of the cost of the solar energy system, including the cost of solar panels, solar equipment (like microinverters, wiring, mounting hardware), installation and labor costs, solar battery backups, and any paid sales taxes for eligible solar-related expenses.
Eligibility requires that the solar PV system is placed in service after January 1, 2023, located at a residential site in the U.S., owned (purchased with cash or through financing), and is new or used for the first time. The credit can only be claimed on the original installation of the solar equipment.
While you cannot claim the credit twice for the same home, you can carry over any unused credit amount to the next tax year for up to five years. Owners of multiple homes with solar installations may be eligible for additional claims.
Unlike tax rebates, which are payable even if no tax is owed, a tax credit is a dollar-for-dollar reduction in the income tax you owe. It offsets the balance of tax due to the government and can be carried forward to the next year if not fully used.
As a nonrefundable tax credit, it doesn’t benefit those who do not owe federal income taxes in the current year. It’s ideal for those with taxable income, but if you’re retired, on a fixed income, or worked part-time, you may not owe enough taxes to utilize the full credit.
2. Property Tax Exemptions
Many states encourage solar adoption by offering property tax exemptions. This means the value added to your property by a solar energy system won’t increase your property taxes, making solar an attractive investment that pays for itself over time.
3. Solar Sales Tax Exemptions
In certain states, purchasing solar panels and related equipment comes with sales tax exemptions. This reduction in upfront costs makes solar installations more affordable and appealing.
4. Utility Rebates for Solar Panels
Some utility companies offer rebates on solar panel installations, acknowledging the benefits that solar energy brings to the community and the environment. These rebates can significantly lower the cost of switching to solar.
5. Solar Renewable Energy Certificates (SRECs)
In states with SREC programs, you can earn certificates for the solar energy your system produces, which can be sold or traded, further offsetting installation costs and providing ongoing financial returns.
6. Net Metering Benefits
Net metering allows you to sell excess electricity generated by your solar panels back to the grid. This not only lowers your energy bills but can also lead to additional savings or even earnings.
7. Solar Rights and Easement Laws
Solar rights laws protect homeowners from HOA restrictions on solar installations. Similarly, solar easement laws ensure that nothing obstructs your solar panels’ access to sunlight, maximizing energy production.
9. State-Specific Incentives
Solar incentives vary by state, offering additional benefits like local rebates, tax credits, or other financial incentives. Working with a solar expert can help you uncover all the incentives available in your area.
Achieve Your Green Energy Goals
Are you interested in lowering your energy costs and adopting renewable energy solutions? MD Advanced Electric offers tailored services for residences and businesses to enhance energy efficiency and sustainability—partner with us to transform your space into a green, energy-saving environment.
Start Your Project Today
In need of electrical work? Let’s start with your name, email, and phone number.