Put Some Sunshine Into Tax Time

Solar power can cut your electricity costs --- and your tax bill.

The financial case for going solar gets stronger every day.

With advancing technologies and the rapid adoption of renewable energy, solar has become more affordable and efficient than ever. A typical system installed today will pay for itself in an average of just five years. By effectively eliminating your electricity bills, a system can end up paying for itself multiple times over.

According to a recent study from North Carolina State University, a home solar system is actually a better financial bet than the average stock market investment. Not to mention: it’s an opportunity to safeguard natural resources and promote energy independence.

Even without tax incentives, going solar would be a smart investment for nearly any home or a business. But—with today’s tax incentives—solar is an incredible bargain.

The 30% federal tax credit is now in effect. The Investment Tax Credit (ITC) is a dollar-for-dollar reduction in the income taxes that you would otherwise pay to the federal government. Both the residential and commercial credits are equal to 30 percent of your solar investment. This is an opportunity for serious savings.

For small businesses, the solar depreciation allowance just expanded. Businesses get an added tax benefit from accelerated depreciation. The recent tax reform law allows a solar array to be 100% depreciated in the first year. This means an additional 10% tax benefit that owners of rentals, commercial real estate, and other businesses—small and large—can realize.

Tax benefits make solar a fantastic investment. But homeowners and businesses must act now because both the solar tax credit and depreciation allowances will phase out soon.

The takeaway is clear: This is the year to go solar.