Good news, green-thinking homeowners! Solar is here to stay. Even with manufacturers facing new tariffs on imported goods, it’s still a great year to invest in renewable energy. Thanks to the 2015 extension of the solar investment tax credit (ITC), you can save a great deal of money on your panels, especially if you buy before the end of 2019.
Now let’s take a look at the ITC. We’ll find out what it can save you, and how the average solar panel price is likely to fluctuate in the coming year.
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Why is the Investment Tax Credit So Important to Solar Households?
No one likes to think about their taxes. But a tax credit, on the other hand? Now that’s a different story. Most homeowners who go solar are thinking about the environment. But they’re also thinking about their bank balances, too. And that’s where the ITC comes in.
This tax credit allows homeowners to deduct a certain percentage of their solar system—including installation costs—from their taxes at the end of the year.
Through 2019, that amount will remain set at 30%. After that, it gradually comes down, eventually dropping off to 10% at the end of 2022. That percentage comes out of your tax liability—i.e., what you owe the government after calculating your income, assets, and exemptions. If your tax liability is smaller than that 30% portion of your installation, the balance is rolled over until the next year. So depending on your finances, you could spend several years tax-free. You can learn all about how to claim the solar rebates credit here.
Ultimately, ITC rate reductions mean you’ll save much more if you opt to buy now instead of dragging your feet. And the good news is that the cost of solar panels isn’t likely to increase much, even in the face of new restrictions for manufacturers. If you’ve been seriously eyeing a new solar energy system, that should come as a big relief!
How Federal Tariffs May Impact System Sales Prices
This month, the outlook for solar dimmed for just a moment after the government approved tariff increases on foreign solar panels. Installers feared that the tariff—which starts at 30% and gradually tapers to 15% after four years—would cause system prices to rise astronomically. That’s because many solar products are imported from China, which offers lower manufacturing prices—a savings that get passed on to the buyer.
However, it looks like some of those anxieties may be quelled, at least for the moment. A few days ago, Chinese solar manufacturer JinkoSolar announced plans to build a factory on US soil. JinkoSolar is a massive producer of solar panels, with over 15,000 employees worldwide and eight manufacturing facilities globally.
What that means for you, the consumer, is that system prices may hold steady for the meantime, allowing you to take maximum advantage of ITC credit already in place from the federal government. For most homeowners, that represents a saving of thousands or even tens of thousands of dollars.
Of course, you don’t have to take it from us. Even consumer watchdog groups agree that solar panels are still a solid buy. They say any price increases are likely to be minute, and of course, you’re guaranteed the maximum tax savings if you take advantage now—plus whatever you don’t spend on electricity.
So it’s time to stop thinking about solar as a fleeting trend and to start seeing it for what it is: here for good.
Ready to get on board with the future of energy? Talk to one of our representatives today and see what solar can save you. After all, daylight’s a-wasting!