The solar tax credit is one of the many reasons why millions of Americans, every year, choose to switch to this popular renewable energy. But with so many changes year after year, how can you always be up-to-speed with the latest trends?

That’s exactly what our blog right here aims to do. Read on for the lowdown on solar tax credit 2021, featuring the latest on a federal, state, and local level.

Why A Solar Tax Credit?

Before we jump into the core of our article, let’s quickly define what a solar tax credit is, and why it exists.

Firstly brought in back in 2005 by the Energy Policy Act, the Investment Tax Credit (ITC) was originally supposed to last only until the end of 2007. However, its popularity and success meant that the US Congress extended this deadline by several years.

Well over a decade later, the ITC remains available to US homeowners, enabling significant savings when installing a solar energy system. As the name itself suggests, these savings are generated by deducting the installation cost from your federal taxes.

More on the 2021 ITC

As of 2021, the federal solar tax credit allows you to save 26% on your solar panel installation costs. This, though, only applies if your taxable income is higher than the credit itself.

Similarly, the ITC is also only available to new solar energy systems, and the current savings will stay in place until the end of 2022.

Starting from 2023, it is likely that ITC-related savings will drop to 22%, plummeting again to 10% by 2024. Meaning: if you are considering investing in solar, you’re better off doing it now.

Beyond the ITC

There are other types of solar incentives, besides the ITC. State and local authorities, for example, often offer residents the possibility to install new solar power systems at reduced costs.

States like New York and California have very attractive and convenient tax rebates and incentives, which lead more homeowners to take advantage of them and opt for solar panels ahead of other states.

The Solar Renewable Energy Certificate (SREC) is one of the most popular types of solar incentives on a state level. If you register your solar energy system with your state SREC, they will track your energy production and release periodical SRECs based on it.

The bottom line? The more energy you generate, the more certificates you get.

To find out whether a local solar energy company like Blue Raven Solar can help you obtain tax rebates and incentives, you can contact them directly.

Get to Know the Solar Tax Credit 2021

If you were looking for more information and updates on the solar tax credit 2021, we hope our article helped. 

The main source of tax rebate for solar energy installation that you can apply for in the United States is the ITC. This is going to deduct 26% of your installation costs from your taxable income.

There are also several other tax rebates that you can take advantage of, both on a state and on a local level. Contact your local solar energy authority to find out more.

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