Solar power is popping up everywhere in the Greenville area. From small solar farms to rooftops, homeowners in the upstate are making the switch to solar energy in large to reap the financial rewards. The cost for a solar installation is at an all-time low and currently there are income tax credits offered by both the federal government and the state of South Carolina.
What Are the Federal Solar Tax Credits and How Could They Benefit You?
To start, the federal solar tax credit, also known as the investment tax credit (ITC), allows you to deduct 30 percent of the cost of installing a solar energy system from your federal taxes. This tax credit is not only for homeowners but business owners as well, and there is no cap on its value.
According to energy.gov, “If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year.” This tax credit will step down starting January 1, 2020. The form to file for the federal solar credit can be found here.
Here is a breakdown of the projected step down:
30% federal tax credit for systems placed in service by 12/31/2019.
26% federal tax credit for systems placed in service in the year 2020.
22% federal tax credit for systems placed in service in the year 2021.
What Are the South Carolina Tax Credits?
Next, if you are lucky enough to live in South Carolina, you will enjoy the benefit of a further tax incentive. South Carolinas is currently offering a 25 percent solar tax credit. This tax incentive does have a few limitations though. The form to file the South Carolina tax credit can be found here.
The limitations include:
Value is capped off at $35,000.
Max of $3500/year or 50% of your state tax liability, whichever is less.
Max of 10 years.
Just as in the federal, if you do not use all the credit in the first year, the credit may be carried forward. The federal may be carried an unlimited amount of years, but the South Carolina tax incentive is limited to 10 years to carry over.
Now is the Best Time to Switch to Solar!
The solar tax incentives will not be around forever. In fact, there are people currently fighting against the South Carolina solar tax credit, which means that we might lose this incentive in the near future. As noted before, the federal solar tax credit will be lowered in 2020, which makes the decision to switch to solar time sensitive if you would like to reap all the current tax incentives.
With the current federal and South Carolina solar tax credits and the decrease in price for solar installations, right now is the best time to switch to solar in South Carolina. If you would like to have your home evaluated for its solar potential and to see which tax credits you qualify for, please fill out the form below.
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