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30% Federal Solar Tax Credit NOW AVAILABLE

Federal Solar Tax Credit

The Solar Tax Credit Cheat Sheet

  • 30% Tax Rebate Credit - recently increased, ACT NOW!
  • Applies to ALL Offgrid Solar builds used for living Full or Part-Time in your RV, DIY Cabin, Vans, Boats, Boondocker, Nomad
  • Covers nearly all Solar Expenses, Fees and Consulting 
  • Cannot be used if you rent the solar equipment or is for a community project
  • Only for New Solar equipment - “First Time Use”
  • Also includes battery systems until Dec 31th 2022
  • After Dec 31st 2022, the battery system needs to be larger than 3 kWh

That’s it, they made it Easy!

Rich soalr Accessories
Rich soalr Accessories

The Residential Clean Energy Credit

In December 2020, the US Congress extended the solar tax credit, providing a 26% tax credit for solar systems installed in residential homes before the end of 2022...

However, as part of the new Inflation Reduction Act of 2022, the tax credit has been extended, as well as increased! The extended tax credit has also been renamed the Residential Clean Energy Credit.

Where the previous 26% tax credit was due to expire at the end of 2022, it has now been extended until 2034 and the credit amount has been increased to 30%!

This update and extension is a welcome surprise for all tax-paying clean energy enthusiasts, as well as the entire solar movement!

What does this mean?

Put simply, for every $1,000 you spend on your solar system, you may be eligible to receive a $300 federal tax credit on your annual tax return... 

How does the new extension to the Solar Tax Credit work?

The newly renamed 10-year extension to the previous Solar Tax Credit means those that install a new solar energy system between 2022 and 2032 will receive a federal government tax credit of 30% of the cost of your installed solar power equipment.

As a tax credit, it will be rewarded as a reduction in the amount of tax an individual will owe at the end of the year.

How long will the extended Solar Tax Credit last?

As mentioned, the bill calls for an initial 10-year extension of the tax credit at 30%. After this, it will drop down to a 26% credit in 2033, then a 22% credit in 2034.
In other words, you have 10 years to take advantage of the 30% credit, then the credit is set to phase out at decreasing percentages.

How much money will I actually save by using the updated and extended Solar Tax Credit?

How much you save depends on the overall cost of your system. To do the math, take your total (estimated) costs and multiply it by 0.30 and this will show your savings. For example, if it's going to cost you $15,000 for all the solar equipment, $15,000 x 0.30 = $4,500. So, you would get a $4,500 reduction from what you owe in federal taxes!

How do I claim the investment tax credit?

It's really pretty simple. You claim the investment tax credit when you file your taxes at the end of the year. Let your accountant know you've gone solar, or if you do your own taxes, you'll need to fill out the IRS Form 5695.

What costs/expenses can you actually claim?

  • Solar equipment
  • Freight shipping costs
  • Solar consulting fees
  • Professional installer fees
  • Electrician fees
  • Tools bought or rented
  • Wiring, screws, bolts, nails, etc.
  • Equipment purchased or rented (scaffolding or a man-lift, for example)
  • Permitting fees
  • Permitting service costs

Am I Eligible? 

What costs/expenses can you actually claim?

You may be eligible for the federal tax credit if you meet the following criteria:

  • Your solar PV system was installed between January 1, 2006, and December 31, 2034.
  • The solar PV system is located at your primary or secondary residence in the United States.
  • You own the solar PV system (i.e., you purchased it with cash or through financing but you are neither leasing nor are in an arrangement to purchase electricity generated by a system you do not own).
  • The solar PV system is new or being used for the first time. 

Frequently Asked Questions

Yes. In this case, the amount you spend contributing to the cost of the solar PV system would be the amount you would use to calculate your tax credit. However, you cannot claim a tax credit if you are a renter and your landlord installs a solar system, since you must be an owner of the system to claim the tax credit.

Source: - Guide to the Federal Solar Tax Credit

The solar tax credit decreases every year. For example, people who installed a solar system before 2019 were eligible for a 30% tax credit. In 2022, it dropped to 26%, already scheduled to drop to 22% in 2023, and currently set to expire in 2024, unless renewed by Congress....

Final Words

  • To qualify, you need to own your solar energy system, not lease it (You can finance it, this is different than leasing... At ShopSolarKits, you'll always be either buying your system outright, or financing, meaning you would qualify.
  • If you owe less in taxes than the total amount of your credit, you can carry over the remaining to the following year.
  • The tax credit will end soon unless renewed by Congress.
  • To learn more, has created a very detailed resource which you can find here.

*Disclaimer: This is NOT tax advice. Please consult your local accountant or lawyer for more advice and direction, but this post covers everything you need to know when it comes to the federal solar tax credit and getting a simple 26% credit towards your taxes and solar power system!

If you have more questions about what solar kit makes the most sense for your needs, feel free to reach out to us today and we'd be happy to help!

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