Regarding alternative energy sources, it’s good to know that there are tax incentives such as solar tax credits that help make the switch to earth friendly energy much easier. These are the motivations put in place by the government to help people who might not be too sure about making the switch. It helps to ease the cost of the initial investment even though over the lifetime of the voltaic system, it will more than pay for itself. In a sluggish economy, every little bit helps and these incentives can add up to huge savings.
The incentives work as solar tax credits, not as solar rebates. The difference is that there must be a balance of liability on the part of the party paying the taxes before the credit can be deducted from it. It is also for this reason that the government allows this purchase to be spread evenly across five different tax years. This is great for the business or home owner who may not have a lot of liability or owe a lot of money for the current year but may owe more in the years following.
So how much of the installation cost can be claimed as solar tax credits? Up to thirty percent of the entire purchase price can qualify. There is no way to give a dollar amount because systems vary wildly depending on how many modules are installed in the home or business. Each module can capture only so much power and turn it into usable energy. Therefore, some people opt to have only a few modules that will aid in providing some of the electricity while others put in much larger systems with many modules so that they can create all of their own electricity without having to be on the grid or get electricity through the local provider.
Of course, it is important to know who does and does not qualify for solar tax credits. Those who rent or lease their home or business’s building do not qualify. Those who lease their voltaic systems, or practice leasing solar panels, instead of buying them also do not qualify. It also matters how much income is being brought into the household as well. If there is essentially no tax bill at the end of the year, then there is nothing against which to deduct the thirty percent. Therefore, certain income levels will not qualify for this tax incentive program.
A good place to go for more in depth questions and answers would be the Department of Energy’s website. There one can find telephone numbers to call as well as many FAQs that might answer the more complex questions. There are also more involved explanations of how the income ratio works and how the offset against the end of the year liability to the IRS works.
For those that do qualify, solar tax credits can help to offset the initial investment by thirty percent. This is a great deal of savings for a system that will continue to save the owner money year after year. Eventually, with the offset program and the savings in electricity bills, the owner is even more likely to see a profit.