Solar Energy Federal Tax Credit
Installing a solar energy system for your Missouri home can be a large investment, though you can earn all of that money back or more, through lower energy bills. In order to make installing solar systems easier and to encourage the transition to renewable energy sources, in 2005, the federal government began offering a significant tax credit for new solar installations. With the Inflation Reduction Act of 2022, the solar tax credit was extended to 2032, and the total amount of the credit was increased from 26% to 30%.
What Is the Federal Solar Tax Credit?
Renewed in 2022, the Federal Solar Investment Tax Credit allows you to earn a tax credit worth up to 30% of the cost of your solar system if it was installed in 2022 or later. The credit is applied to both the equipment costs and the installation costs, and it is available only for systems that you own, whether they are paid for upfront or financed with a loan.
How Do You Qualify for the Federal Tax Credit?
To be eligible for the 30% Federal solar tax credit, your solar system must be:
- Installed in 2022 or later
- Located at a residential home, though not necessarily your primary residence
- Owned by you through financing or upfront payments. Leased systems are ineligible.
How Do You Apply for the Credit?
To claim the federal tax credit, you must fill out IRS form 5695 and include it with your tax returns for the next filing period after the solar installation. If your tax credit exceeds the amount of money that you owe to the IRS, the remainder of the credit can be applied to the previous year’s taxes, or it can be carried forward to your tax returns for future years.
Increase Your Tax Credit With a Solar Battery
You can increase the amount of your solar tax credit by adding a solar battery to your system. The battery qualifies for the credit if it is recharged by solar energy more than 75% of the time. Normally, during a power outage, the typical grid-tied solar system will also shut down because it relies on the utility grid for power storage. A solar backup battery allows you to use your solar energy anytime you need it—when the grid is down, the clouds are out, or during periods of peak demand.
Solar System Installations in Missouri
Save money on your electrical bills, become more energy independent, and earn a generous tax credit with a residential solar installation from Solera Energy. We serve homeowners throughout Missouri, and we can custom design a solar energy system that meets all the electrical needs of your home. We can also help you find state and local solar incentives and rebates for even more savings. With over a decade of experience, you can count on our solar energy experts for unsurpassed quality, integrity, and excellence.