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Incentives and Tax Credits for Solar Systems

Opting for solar energy can be a financially rewarding decision, thanks in part to various incentives and tax credits designed to make solar more accessible. This guide from Your Home Solar will provide an overview of the federal solar tax credit, touch on local incentives, and explain how to apply for these benefits.

Overview of Federal Solar Tax Credit

The federal solar tax credit, also known as the Investment Tax Credit (ITC), is one of the most significant incentives for solar installation in the United States. It allows homeowners to deduct a portion of their solar costs from their federal taxes. As of now, the ITC offers a 30% tax credit on the cost of the solar system. This means that for every dollar you spend on your solar system, you save 30 cents in federal income taxes. It’s a substantial savings opportunity that can make your switch to solar even more affordable. The ITC applies to both residential and commercial systems, and there is no cap on its value.
Cost and Financing of Solar Systems

Local and State Incentives for Solar

Applying for the federal solar tax credit involves the following steps:

Determine Eligibility

The cost of solar panels primarily depends on their efficiency and longevity. Higher-quality panels may come with a higher price tag, but they can produce more electricity and potentially last longer.

Gather Required Information

You’ll need the total cost of your solar system and the date of installation.

Complete IRS Form 5695

Fill out IRS Form 5695, “Residential Energy Credits,” when preparing your federal tax return. You’ll input your solar energy system’s costs in this form to calculate your credit amount.

If you’re unsure about this process, it’s recommended to consult with a tax professional to ensure all steps are accurately completed.

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Local and State Incentives for Solar

While Tennessee does not currently offer statewide incentives for solar installations, it’s possible that local utility companies provide programs or incentives to encourage their customers to go solar.

These incentives can vary by utility company and could include rebates, performance payments, or discounts. However, homeowners are advised to check with their specific utility company or contact us at Your Home Solar to investigate potential local incentives for you.

Remember, investing in a solar system is one of the few home improvements that can pay you back over the period of ownership. It’s a fantastic way to increase your property value, save on energy bills, and contribute to a sustainable future.

At Your Home Solar, we’re committed to helping East Tennessee homeowners understand and navigate the financial aspects of solar installation. If you have more questions about solar incentives or wish to schedule a free inspection and estimate, don’t hesitate to reach out to us. Let’s work together for a greener, more sustainable future.

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Your Home Solar offers an incredible opportunity to empower your home with clean, renewable solar energy. Contact us today for a free consultation.

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