Many people have been going solar for the last decade, and the government has played a major part in moving to clean energy. The Solar credit is one of the incentives promoting clean energy, in our case, to people going solar.
The solar tax credit sets to reduce the tax incentives for homeowners who choose to go solar. With these incentives, many people have decided to select the environmental-friendly energy move.
Plus, solar is a reliable, clean energy source that efficiently serves all your home’s needs.
Will solar credit be extended? We will focus on this question and other important questions on the topic, so read on!
What Is The Solar Credit?
The Solar tax credit means you can reduce the income tax you are supposed to pay in exchange for going solar. It means that if you install the solar energy generation system right now, you can claim a solar tax credit.
Your tax credit covers 30% of the system’s cost and the installation fees.
For example, if the total amount for installing a solar energy generator is 20,000, you can claim a solar tax credit of 30%, meaning that you will pay $6,000 less for the tax you owe for the year.
It is a solar incentive aiming at promoting solar energy and reducing the tax burden for people who choose to go solar.
There is an extension of the solar credit, which will go along for the next ten years. It means that if you go solar from now up to 2033, you are eligible to apply for the solar credit.
But, there are a few qualifications you must fulfill to become eligible for the solar tax credit, including:
The solar energy generating system must be original and a new installation that is functioning for the first time
Homeowners must own the system and must have financed the buying of the components and the installation process.
You mustn’t be using the PV system under lease and paying another person for the solar energy you are consuming
For the solar credit, you can only claim a 30% tax credit for the PV system, components, installation, and other fees. Other things like the appliances you apply for solar energy aren’t part of the tax credit.
Is There A Solar Credit Extension?
Since 2006, the government has set the solar investment tax credit to motivate people to go solar. Of course, such a move was to promote change management and ease the financial process of going solar.
The solar credit offers tax reduction incentives to everyone who decides to invest in a solar system. In August 2022, the government recently made going solar even more enticing by extending the solar credit by signing the Inflation Reduction Act.
So, is there a solar credit extension? Yes!
There are many climate-conscious incentives to promote a friendly environment. However, the solar credit extension is the most impactful.
This incentive is popularly known as the Solar Investment Tax Credit, ITC, which aims to raise the credit you can apply to reduce your tax burden by at least 4% compared to other homeowners.
How Long Do Solar Panels Last?
The solar credit incentives work to reduce the cost and lessen the expenses of people who choose to go solar. But, after installing the solar panels, how long do they last?
Are you forced to buy new solar panels in a short period?
Solar panels have an industry standard of having a lifespan of at least twenty-five years; for some, they can extend up to thirty years. Plus, many manufacturers offer warranties for these twenty-five years.
The longer the solar panels continue to work effectively, the more money you will save. So, you can expect your solar generating system to function for the next twenty-five years before you experience any noticeable problems.
Such data shows that going solar is a significant investment where homeowners will easily get back their money and save a lot. Plus, with the solar credit extension, the process of going solar is bigger and better.
What happens after these twenty-five years? The solar panels will continue capturing sunlight and converting it to solar energy, but the process will be less-efficient compared to its early days.
Despite the information that your solar panels won’t stop working after the noticeable degradation, it points out that it is time for you to replace the solar panels.
Note that solar inverters in the solar generating system have the shortest lifespan of 10-15 years. Such numbers are expected since solar inverters’ nature of work is complex compared to other components.
But replacing solar inverters cost at least $1000, which is an excellent investment since you will receive stable solar energy for at least ten years.
Are Solar Panels Advancing?
The government is set on promoting the use of the solar generating system, evident in the solar credit 2022 extension. It shows that they believe that clean energy is substantial enough to serve the people without affecting their everyday life.
Currently, the solar power sector covers at most 3% of the globe’s energy sector. The numbers aren’t great, but the area is relatively new, and its capabilities will improve with time.
Plus, the solar tax credit extension is a big push for people to go solar. So, how capable are the solar panels, and are they advancing?
In the next decade, the solar power sector is set to achieve a considerable increase in the number of homeowners going solar. It is set to account for 52% of the power capacity growth of the globe by 2032.
With that, solar energy will account for the energy industry by 11%, a significant extension from 3%.
Improvements of important solar components such as solar cells, solar modules, mounting systems, solar panels, and software are set to upgrade to help decrease the costs in the solar investment process.
Over the coming decade, the solar system is expected to have stable growth in the energy industry with the evolution of the solar system and its components.
So, are solar panels advancing? Yes!
Experts in the industry are set on making the necessary upgrades to promote solar energy and improve its capability to produce clean energy.