One of the best ways to make your investment in solar energy a financially successful one is to take advantage of all the incentives available to you. That’s why we’re committed to making sure you understand your options fully before making that investment.
What is the Federal Tax Credit for installing solar panels?
The federal solar tax credit, known officially as the Investment Tax Credit (ITC), allows you to deduct 26% of the cost of installing a solar energy system from your federal taxes. The 26% credit will remain in effect for 2021 and 2022, then drop to 22% in 2023.
Why are solar installations becoming more common?
Due to popular demand and supplemental incentives slashing costs, solar installations have been flourishing within the U.S. market over the past 10 years. In fact, within the past 5 years the cost of a solar installation has dropped significantly, largely due to the global growth of mass production in equipment manufacturing.
How much does a solar installation cost?
While costing a solar installation may seem complicated at first, generally speaking, solar installations are sized based on a user’s past 12 months’ electrical usage or consumption. Once that is determined, a solar array is designed and priced accordingly.
As of October, 2020, solar panel costs for an average-sized installation in the U.S. usually range from $11,144 to $14,696 after solar tax credits, and the average price per watt for solar panels ranges from $2.51 to $3.31. Every install will vary, of course, but this is a good starting point.
Often, even if the solar installation is financed, the monthly payment is less than the average monthly electric bill. Once the solar financing is paid off, you own your power generation system and no longer have to pay for electric usage. You can read more about the cost of going solar here.
What does this all mean?
2021 is a great year to go solar! By converting to solar, you’re ensured of receiving the federal tax credit this year, in addition to yearly savings on your monthly electric bill going forward.