Solar subsidies are incentives designed to make alternative energy more attractive to the home and business owner today. These incentives were originally offered to offset the expense of the investment required to purchase the panels and the installation. Many people know that there are some types of incentives, but they may confuse the terms solar tax credits and tax deductions when trying to figure it out.
A tax deduction has more to do with how much someone makes or how much income they generate to put them in a certain tax bracket. This process defines what and how much of an item can be deducted. A tax credit is aimed at the overall cost of items and is not dependent on the amount of income that is made per year. These solar subsidies are considered to be solar tax credits.
The solar subsidies are designed to give back a percentage to the home or business owner who invests in the panels as an alternative means of energy producing potential. The amount that is federally mandated is thirty percent. Therefore, a home owner or a business owner will never get back the entire amount of the original purchase price. Fortunately, because of the savings involved with generating alternative power via solar panels, it is possible to pay for the system over its lifetime. This will provide the customer a great savings in the long run.
It is also important to note that only the home owner or business owner can apply for solar subsidies. Tenants or those leasing a business space such as a building cannot apply for the tax credit. The tax credit is also only available to those who purchase the panels. Those who lease these types of systems are not eligible.
There are other prerequisites that must be met in order to qualify for the solar subsidies. The panels have to be from a licensed and authorized dealer and installed professionally. Solar energy must be the primary source of electricity for the home or the business. The home must be located in the U.S. The home requirement must be one of the following: mobile home, co-op apartment that is purchased, houseboat, manufactured home or condominium.
In order to qualify for the tax credit, a home or business owner is required to file a special form with the IRS. The form number is 5695. It has to be filed along with the receipts for the purchase and installation of the system, as well as the year-end taxes. In addition to this form, a manufacturer’s certificate is also necessary. Most manufacturers have the certificate on their website if it was not originally provided. A customer can also call the manufacturer and have it mailed to them.
This is a great way to take advantage of a system that will provide alternative energy. It also allows the home or business owner to reduce their reliance on utility generated power and save a great deal of money. This system can also be a life saver in the event of a power outage as a backup power supply.