Month: July 2023

Solar Tax Credits For Businesses In Florida 2024: Full Explanation

Solar Investment Tax Credit (ITC) 2020 Step Down

A Solar Investment Tax Credit (SITC) is a form of tax credit the Government offers nationwide to owners of commercial and residential buildings who invest in solar panels to harness renewable energy to reduce electricity consumption. What are the main benefits? Owners get tax deductions for the total cost of installing the solar panel system and even considerable savings on monthly energy bills.

The good news is that the Government announced a Solar Energy Tax Credit Extension for 2024. Stay with us as we tell you everything you need about these deductions, the percentages, eligibility criteria, how to apply, and much more.

Let’s dive in!

Understanding Solar Tax Credits

Definition of solar tax credits

The solar tax credit is a federal incentive the Government offers to commercial building owners who install solar panels on their property through December 2034. This type of credit allows property owners to recover a fixed percentage of the solar panel system’s cost and a lower cost per kW of consumption, making it attractive to taxpayers.

Importance and advantages for businesses in Florida

The Solar Tax Credit offers excellent advantages to businesses in Florida since it allows them to save money by improving their property, and the Government reimburses them a percentage of the installation. But there is much more to it:

  • Savings on electric bills.
  • Reliable and stable energy source.
  • Not affected by power outages or blackouts.
  • Reduce greenhouse gas emissions.
  • Demonstrate commitment to environmental sustainability and social responsibility.

Overview of federal and state-level tax credits Tax credits are incentives created by the Government to ease the burden on taxpayers, in this case, allowing businesses in the Florida area to modernize their energy consumption sources for the planet’s sustainability and commitment to future generations. Its goal is to make it easier for businesses to make the transition. This type of incentive is not new in our state; since 1997, state legislators have promoted programs to transition to renewable energy and be more environmentally conscious.


2. Solar Investment Tax Credit (SITC)

Eligibility criteria

  • This benefit can only be claimed once, in the tax year, your solar panel system is installed.
  • You can claim the Solar Investment Tax Credit if you installed them from 2006-2034.
  • You can only claim it for the original installation of the system, not for reuse or upgrade.
  • If you use your system for a community project and it does not exceed the electricity consumption standard.
  • It only applies to taxpayers who own the system, not those who lease the property.

Pro tip: certified companies will calculate the value of the credit to be received in addition to the contract, so you know the value before you buy.

Details on the credit percentage and maximum credit amount

According to the Inflation Reduction Act of 2022, the maximum ITC percentage taxpayers could claim up to 30% of the total installation cost of their solar equipment. If the installation cost is $16,000, you could deduct a value of $4,800; if your tax is less than the credit amount, the difference will be applied to the following tax year.

Steps to claim the Solar Investment Tax Credit

  • To claim the tax credit, you must only fill out income tax form 5695 and fill it with your annual income tax return.
  • You must then include the installation of the solar equipment as part of the cost of ownership and the total cost of installation shown on the contract with your supplier.
  • Enter the corresponding calculations on lines 6 (A and B).
  • Complete the form’s final lines (15 and 16) with the exact amount to be deducted.


3. Solar Energy Tax Credit Extension Overview

In 2022 the Federal Government created the Inflation Reduction Act, which made it even more attractive for homeowners to transition to clean energy by incorporating a 30% income tax deductible ITC. The purpose was to reduce electric energy consumption and dependence on fossil fuels.

Importance and impact on businesses in Florida

The acquisition of the equipment could be an obstacle to using solar energy since it is a considerable investment. However, the Commercial Solar Tax Credit has excellent advantages, from using more stable energies with less environmental impact, efficient energy consumption, etc.

 Details on the extension timeline and eligibility requirements

The Government offered a 30% ITC for 2022, whose value would decrease in the following years. However, they have decided to extend the value for 2024. Next year, homeowners will only be able to claim 26% of the total costs, and by 2035 the credit will cease to exist. To claim it, you must be the exclusive owner (not a lessee) of the solar panel system, and the equipment must be new or not previously used.


4. Commercial Solar Tax Credit

Eligibility criteria for businesses in Florida

Commercial building owners must only purchase a solar panel system by 2024 to qualify for the 30% ITC extension. They may not lease equipment or purchase solar energy from third parties.

 Credit percentage and limitations

We have insisted that the value of the Commercial Solar Tax Credit for this year only remains at 30%, which you can deduct from this year’s tax return. That percentage is deducted from expenses such as:

  • The solar panel system.
  • The energy storage components.
  • The installation cost: Those independent devices whose hourly consumption does not exceed 3Kw.

Pro tip: Remember that if you purchase other equipment that consumes this type of energy, its cost cannot be included in the credit.


5. How to Maximize Solar Tax Credits in Florida

Tips and strategies for businesses to maximize their solar tax credits

  • The ideal time to purchase a solar panel system is in 2024 to take advantage of the maximum 30% ITC amount and be able to deduct it from your tax return.
  • We suggest you purchase all the necessary storage components based on your property’s energy demands to add to your total cost deduction.
  • Before purchasing your solar panel system, trust a certified company. Otherwise, you will not be able to apply for the benefit.

Considerations for solar system installation and documentation

  • It is crucial to consider your property’s current and future energy needs when selecting the ideal system.
  • Think about the geographic location of your property, the amount of sunlight it receives during the day.
  • You should check the condition of the roof, its angle, and its orientation to see if it can support the system.
  • Remember the permits you must apply for from the county to do this work.

Working with certified solar installers and tax professionals

The company you trust must be certified to handle this type of equipment. A professional will provide a contract indicating the price, time, and work schedule. They will also provide the manufacturer’s warranty document and an installation guarantee. Remember that a professional company will even calculate the ITC for installing your equipment so that you have an idea even before you sign.



The advantages of the Commercial Solar Tax Credit for businesses in the Florida area are many; not only does it allow you to switch to more stable, sustainable, and efficient energy sources. It protects your equipment from events such as power failures or outages and allows your business to run smoothly without leaving a footprint on the environment. It also allows them to obtain a decrease in their income tax return and is a more economical option in the long term since installing solar panels reduces the consumption of Kw per month.

What are you waiting for to make the switch? Ready to install your solar panel system?

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Solar Tax Credit Extended Through 2023: Benefits, Requirements, and Opportunities

Installing solar panels is a decision where owners consider the pros and cons in great detail. However, the installation cost was undoubtedly the main deterrent to taking the plunge. Fortunately, in 2022, the Inflation Reduction Act included a Solar Investment Tax Credit (ITC). The ITC is an incentive the government offers businesses to switch to alternative energy forms through considerable taxes reductions. However, its maximum credit percentage (30%) could only be enjoyed until December 2022. But don’t worry! If you have yet to make the installation. We have good news; the government announced the extension of SITC for 2023; stay with us and discover all the opportunities you could take advantage of. Let’s get started!

1. What is the Solar Tax Credit?

The Solar Investment Tax Credit is a government incentive, which implies a percentage reduction in the amount to be paid by the taxpayer in his income tax return. To do so, property owners must purchase and install photovoltaic systems. According to EPA, by 2017, the United States generated 15% of the greenhouse gases emitted globally. So, its purpose is that more and more people join clean and sustainable energy programs.

Here are the Solar Investment Tax Credit benefits!

  • You get a 30% credit calculated according to the total cost of the solar panel installation. • The credit can be claimed in the tax year of the equipment installation.
  • The amount is calculated considering the system equipment costs, wiring, hardware, energy storage, installation, and labor costs.

Why adopt electric energy in your business?

  • Electric bill savings: businesses generate power and reduce dependence on electric power.
  • Increased energy resilience: businesses get a reliable and stable power source unaffected by power outages or blackouts. This is useful during hurricanes, storms, or emergencies.
  • Environmental sustainability: reduces greenhouse gas emissions and dependence on fossil fuels.
  • Improving company image demonstrates a commitment to environmental sustainability and social responsibility.


2. Solar Energy Tax Credit Extension

The reason behind the extension of the solar tax credit in 2023 is due to the excellent response of property owners in the last half of 2022 to switch to renewable energy sources, in which the number of people installing PV systems increased. Therefore, the legislators decided to extend the duration of the 30% credit, which will start to decrease from next 2024. The idea is to reduce dependence on electric power by 2035, with a definitive integration to clean energy programs. The extension shows the government’s support by reimbursing taxpayers dollar for dollar and alleviating the impact on their pocketbooks to optimize their operations sustainably.

The key benefits of the Solar Energy Tax Credit Extension are:

  • Return of at least 30% of the investment.
  • Use of alternative energy sources.
  • Reduced carbon footprint
  • Efficient and less dependent energy consumption.


3. Benefits of the Solar Tax Credit Extension

Beyond the great benefit to the planet in terms of reducing greenhouse gas emissions from the use and production of electric power, fossil heat sources, and those industrial processes, there are also significant financial benefits that commercial and residential building owners can enjoy:

  • If your PV system costs $16,000, the government reimburses you through a tax credit of $4,800.
  • You pay a lower amount on your income tax return this year.
  • If the amount of the credit exceeds your return, you can enjoy the difference in the following year.


4. Requirements for Claiming the Solar Tax Credit

Eligibility criteria for individuals and businesses to claim.

  • You must acquire a solar panel system for your commercial or residential property by December 31, 2023.
  • You must be the sole owner of the solar panel equipment.
  • The property and the system must be located within the United States.

Other requirements to consider.

  • The solar panel system you purchase must be capable of providing power to the entire property.
  • The installation of solar water heaters can be included to claim the tax benefit; these have a solar collector and a tank to use thermal energy to heat the water.
  • Certified companies must install photovoltaic systems.

Documentation for the application

  • With your income tax return file, include form 5695.
  • Calculate the value of the credit.
  • Include the total installation amount as qualified solar electric property costs.
  • Enter the cost as reflected on your contract.
  • Complete the appropriate calculations on lines 6 (a and b) and 15 and 16.


5. Commercial Solar Tax Credit opportunities: Solar Panel ROI

This is the best time to make the switch to solar energy since building owners get a quick return on investment and considerable savings in their way of working, such as:

  • Energy savings: they can start generating their electricity and take advantage of the sunshine that characterizes our state, where energy bills are also high.
  • Other tax incentives: in addition to the Commercial Solar Tax Credit, the Florida government offers other incentives such as the sales tax exemption, which implies a savings of 6% on the installation.
  • Increased property value: this improvement makes the property more attractive to future buyers, translating into a higher value in the real estate market.
  • Reduction of operating costs: it favors the business’s financial stability since it reduces electricity costs.


6. Maximizing the Solar Tax Credit

Here are some final tips to help you get the most out of the Solar Investment Tax Credit: Understand all the requirements: from purchasing brand new solar panel equipment, remember that you must be the owner and entrust the purchase and installation to a certified company.

Take advantage of the maximum amount: become the owner of the photovoltaic system before the end of 2023. Remember that by next year the percentage will drop to 26%.

Work with a qualified solar panel company: one that offers the necessary equipment, has the technical expertise to handle the system and get it up and running quickly, provides you with the necessary guarantees, and even addresses your questions and concerns about the Solar Investment Tax Credit.

Consult with tax experts: they will provide all the documentation you need to apply for the ITC correctly. They can also advise you on regulatory compliance and the different local, state, and federal incentives.


Final Thoughts

The year 2023 is the ideal time to make the installation of solar panels on your commercial property, as you can take care of your pocket, with significant savings in the installation, a reduction of your taxes, and a lower consumption of electricity to lower the emission of greenhouse gases in our state. In addition, it demonstrates the awareness and commitment of the owners to a sustainable future where the way of working and production is not at the expense of the quality of life of the citizens and the misuse of resources.

Finally, the Solar Investment Tax Credit marks the beginning of a progressive transformation in the way of living and doing towards energy stability and efficiency.

Ready to enjoy the extension of ITC 2023? Need a solar panel installation company?

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