When Is Leasing a Solar System Right for You?
by Kelly Anderson, on Dec 9, 2019 9:30:00 AM
Understanding tax appetite and whether you'll benefit from the investment tax credit
There are a lot of complicated questions that go with investing in a solar panel system for your Bloomington, IL property. Not only are you wondering whether or not your home will benefit from the system, but you need to know how it will look, how it will affect your monthly expenditures and more. One of the biggest questions homeowners have is how leasing will affect the overall solar cost. Ultimately, that’s a question that can only be answered by you and your tax advisor. However, we’ve put together a blog explaining some situations where leasing may be more beneficial. Ready to find out? Keep reading.
See Also: What Are SRECs?
What’s Your Tax Appetite?
To determine the benefits of owning or leasing a solar panel system, you have to be aware of your tax appetite. That’s a term used by the renewable energy industry and refers specifically to the investment tax credit (ITC).
The ITC currently awards 30 percent credit toward the purchase of a solar panel system. So, for instance, if your solar installation costs $10,000, you would receive a $3,000 credit when you file your federal taxes. The ITC program is only available to homeowners that own their system and cannot be redeemed if you lease it.
No brainer, right? Not exactly. This is where tax appetite comes in.
Appetite refers to the amount you pay in taxes each year, and whether or not you can receive the full benefit of the ITC. So, if you pay $1,000 in taxes each year, you would pay nothing for the next three years, which might not be as valuable as if you were to get the full credit within a single year.
If you can’t enjoy the full benefits, you may want to consider leasing as an alternative to effectively lower your monthly energy bill.
Of course, other issues may arise, and it's always best to understand your tax situation and consult professional assistance to determine what's best for you.
Solar Should Just Make Sense
At Summit Solar, we won't pressure you into buying a system that won't benefit you. We believe your investment should make sense.
As a premium solar panel provider, we offer white-glove service to help guide you through every step of the process. From initial shading analysis to system design -- we’ll even get the permits and documents signed for you!
If you’re ready to learn whether solar is right for you, click here or give us a call at 864-250-0026 today!