Imagine if you could get rewarded just for switching on all the light bulbs in your home? This is how the federal government rewards all home and business owners that install residential solar systems. When home and business owners install solar panels, the federal government pays them Solar Investment Tax Credit (ITC). This solar tax credit is part of the movement to lessen the nation’s dependence on fossil fuels and to encourage more people to switch to solar energy.
What are the advantages of solar energy? And why is solar tax incentives 2020 important? For years, researchers and articles have proven that the daily usage of solar energy helps impact our environment and our well-being.
In the United States, about 29 percent of global warming emissions come from our electricity sector, according to UcsUSA.org. They found out that if more individuals use renewable energy this could help reduce the electricity sector’s emissions by approximately 81 percent by the year 2030.
Still according to UcsUSA.org. The air and water pollution emitted by coal and natural gas plants are linked with breathing problems, neurological damage, heart attacks, cancer, premature death, and a host of other serious problems. A study at Harvard University estimated the life cycle costs and public health effects of coal to be an estimated $74.6 billion every year.
Now you can understand why installing solar panels as a homeowner and business owner should make you proud because you help to reduce most of these negative health and environmental impacts polluting our air and water.
Renewable energy also supports thousands of jobs in your local community. In 2016, the solar industry employed more than 260,000 people, including jobs in solar installations, manufacturing, and sales. The 2009 Union of Concerned Scientists study showed a 25% growth of renewable energy jobs by 2020.
Therefore, because taking solar energy advantage helps individuals and communities, the solar energy government incentives is a great way to offer a solar tax credit to taxpayers who invest in solar panels.
What are solar incentives?
Solar incentives are when both homeowners and businesses can qualify for a federal solar tax credit. Both residential and commercial customers can use this solar tax credit, which applies to photovoltaic (PV) systems, solar heating and cooling, and other solar energy technologies.
The solar tax credit was originally established by the Energy Policy Act of 2005 and was set to expire at the end of 2017, but experts believed that an additional five-year extension would bring the solar industry to its full potential. The Omnibus Appropriations Act of 2015 extended the residential ITC through the end of 2023 with the percentage taxpayers can receive dropping by 4 percent every two years. Let me explain the breakdown of ITC to you:
- In 2019, It was at 30% of the cost of the system.
- In 2020, It is presently at 26% percent of the cost of the system.
- In 2021, It will be at 22% percent of the cost of the system.
- In 2022 onwards, owners of new commercial solar energy systems can deduct 10% of the cost of the system from their taxes. There is no federal credit for residential solar energy systems afterward, so 2020 is a great year for home and business owners to take advantage of the 26% solar incentives in Texas before the year ends.
State and local government solar incentives in Texas:
On top of the federal tax incentives 2020, you may be eligible to receive state, county, and municipal incentives for switching to sustainable solar energy. The Database Of State Incentives For Renewable & Efficiency has currently 157 incentives available in the state of Texas and many more. Here is an overview of a few solar incentives in Texas:
- City of Houston Property Tax Abatement for Green Commercial Buildings. If you invest in one of the many types of solar energies listed for this credit on your whole building (or in “comprehensive measures”), you can receive one of four different levels of tax credits. These range from 1 to 10 percent.
- Renewable Energy Systems Property Tax Exemption. This incentive is for commercial, industrial, and residential solar systems, including PVs, wind, solar heating, and solar thermal electric. Receive a 100 percent property tax incentive on the value the system added to your home or business if you use your system primarily for on-site energy needs.
There are dozens of other states and cities specific solar incentives in Texas. To get more information you can always book an online appointment with our best solar experts at IntegrateSun, and we will help you choose the best solar energy system that suits your need and budget. Click the button to book a quick and easy appointment today.
Performance-based incentives (PBIs) give cash payments to citizens based on the number of kilowatt-hours (or BTUs) a renewable energy system generates. Several PBIs exist throughout Texas, including the CPS Energy-Solartricity Producer Program and PV incentive programs from Austin Energy. PBIs are a type of feed-in tariff that will credit your utility bills according to your PV system’s performance. This type of incentive rewards citizens for properly installing and maintaining their solar systems.
Other Incentives for Solar Energy
There may be other incentives for investing in solar available to you. For example, businesses may be able to write off the value of a solar system through the Modified Accelerated Cost Recovery System (MACRS). This system reduces the amount of taxes a business must pay and uses an accelerated depreciation system to give returns on investment sooner rather than later. You may also qualify for subsidized loans to fund your installation and tax exemptions in some municipalities that keep your property tax bill the same even if your property value increases because of a solar system.
To learn more about which solar panel is best for your home, IntegrateSun consists of the best experienced solar consultants in Texas to guide you through your solar journey and show you exactly the information you need to make your experience worth it.
Join thousands of homeowners today and save better with solar panels. For solar requirements contact us today, get a quote, or schedule a virtual appointment to speak with an IntegrateSun solar consultant. Follow us on social media, and leave a comment below, we are happy to respond back. Today’s energy for a brighter tomorrow.