It's getting to be that time of the year again — tax time, that is. As all new rooftop solar homeowners should know who purchased a system in 2014, they are eligible for a Federal Investment Tax Credit of 30 percent of the cost of their system. This tax credit is good for both solar PV and solar thermal (hot water) systems. The solar ITC applies to the owner of the system, which is the homeowner for purchased systems or the leasing/PPA company for systems that are owned by third parties.
The solar ITC is arguably the most important incentive to solar customers, but it goes to zero on January 1, 2017. Claiming the credit on your tax return is surprisingly easy. All you need is the complete set of invoices from your installer that summarizes your qualified costs for your system — then you can reduce your 2014 tax bill by 30 percent of those total costs. For example, if your purchase price for the system installed in 2014 was $20,000, you get to reduce your 2014 tax bill by $6,000.
So Listen Up to this week's Energy Show on Renewable Energy World as we go over the rules that apply to this tax credit, and fill out IRS Form #5695. And finally, although solar guys like me understand the basics of the 30 percent solar ITC, please remember to get advice from your tax professional before filing.
About The Energy Show
As energy costs consume more and more of our hard-earned dollars, we as consumers really start to pay attention. But we don't have to resign ourselves to $5/gallon gas prices, $200/month electric bills and $500 heating bills. There are literally hundreds of products, tricks and techniques that we can use to dramatically reduce these costs — very affordably.
The Energy Show on Renewable Energy World is a weekly 20-minute podcast that provides tips and advice to reduce your home and business energy consumption. Every week we'll cover topics that will help cut your energy bill, explain new products and technologies in plain English, and cut through the hype so that you can make smart and cost-effective energy choices.
About Your Host
Barry Cinnamon is a long-time advocate of renewable energy and is a widely recognized solar power expert. In 2001 he founded Akeena Solar — which grew to become the largest national residential solar installer by the middle of the last decade with over 10,000 rooftop customers coast to coast. He partnered with Westinghouse to create Westinghouse Solar in 2010, and sold the company in 2012.
His pioneering work on reducing costs of rooftop solar power systems include Andalay, the first solar panel with integrated racking, grounding and wiring; the first UL listed AC solar panel; and the first fully “plug and play” AC solar panel. His current efforts are focused on reducing the soft costs for solar power systems, which cause system prices in the U.S. to be double those of Germany.
Although Barry may be known for his outspoken work in the solar industry, he has hands-on experience with a wide range of energy saving technologies. He's been doing residential energy audits since the punch card days, developed one of the first ground-source heat pumps in the early ‘80s, and always abides by the Laws of Thermodynamics.
Lead image: Green microphone via Shutterstock