Will You Get a Solar Tax Credit if You Lease Your System?
by Kelly Anderson, on May 4, 2020 12:57:39 PM
Find out if you can benefit.
Homeowners have a lot of questions about investing in a solar panel system for your Decatur, IL property. You're not just wondering whether you'll get the full benefit from the system, but also how it will affect your monthly energy bill and more. Among the most common questions for homeowners is how leasing will affect the overall solar cost. Can they benefit from the full solar tax credit or other incentives? For an official answer, we recommend you ask your financial advisor. However, this blog will explain some situations where leasing may be more beneficial. Ready to find out? Keep reading.
See Also: What Are SRECs?
What to Know About Tax Appetite
To determine your potential benefits of leasing a solar panel system, you must understand a concept called "tax appetite." Many in the renewable energy industry use the term about the Investment Tax Credit (ITC).
The ITC currently awards 26 percent credit toward the owners of a power-generating solar system. For example, if your solar installation costs $10,000, you would receive a $2,600 credit when you file your annual taxes. However, the ITC is only available for homeowners who purchase a system, and not for those who lease them.
Appetite is the amount you pay in taxes each year, and whether or not you can benefit from the ITC. So, if you spend $1000 in taxes each year, you would pay nothing for the next two and a half 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 lower your monthly energy bill effectively.
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 Make Sense
At Summit Solar, we won't pressure you into buying a system that won't offer the full benefits of saving money with solar. 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 get the permits and documents signed for you!
If you’re ready to learn whether solar is right for you, click here or call us at 888-884-3557 today!