Take Advantage of Solar Energy Tax Breaks for 2020
As the cost of going green becomes more affordable each year, many commercial building owners are tempted to hold off on installing solar panels in an attempt to get the best deals. But as the federal investment tax credit (ITC), also known as the solar tax credit, decreased on January 1 from 30% to 26%, the clock is ticking on getting the best deal on your solar investment. Now is the best time to install a solar roofing system before next year’s step-down.
What is the Federal Tax Credit?
The federal solar tax credit previously allowed commercial building owners to deduct 30% of the cost of installing a solar energy system from their federal income taxes until 2020. The tax credit can also be claimed as soon as the construction of the system begins. The credit and depreciation benefit helped reduce the system price by as much as 60%. Add to that savings from a reduced utility bill, and business owners were looking at a bright investment.
Solar ITC Step-Down Schedule
Since the ITC was enacted in 2006, the U.S. solar industry has grown by more than 10,000%, with an average annual growth of 50% over the last decade. Even with this success, starting January 1, 2020, the value of the tax credit began its decline from 30% to its current 26%. Next year, the credit drops even further to 22% and plummets to a permanent 10% in 2022 and onward. A four percent decrease in 2021 may sound small, but when installing a solar panel system, especially on large commercial buildings, the loss in savings can be significant.
Things to Consider When Installing Solar
You’ve decided now is the time to go green – so what’s next? Be sure to confirm the installation timeline once you have chosen a company. Schedules vary so it is important to confirm that your system will be installed before the end of the year to get the maximum tax incentive.
Seeing (the Savings) is Believing
Some of Florida’s largest businesses like Publix Super Markets, Ed Morse, Lockheed Martin and Advanced Roofing have installed solar on their properties, from rooftop installations to solar carports. Solar has a short payback period, provides steady financial returns and helps business owners hedge against rising energy prices. According to our data, Advanced Roofing paid on average $1,623.00 in monthly electricity bills before going solar. After the installation of an 84-kW solar carport at our headquarters in Fort Lauderdale, our electricity bill is approximately $890.00 – a 55% reduction.
How Much Money Can Solar Save Your Business in 2020?
Contact us today for your complimentary energy audit and project quote.