Good news for heliophiles and taxophobes
Back in 2005, the US Congress passed a bill giving federal tax credits for the installation of renewable energy sources. The bill has been extended multiple times since then and the terms have
changed multiple times, also.
The good news: The tax credit was scheduled to decline to 22 percent in 2021 from 2020’s level of 26 percent, but Congress extended the credit for two more years and kept the credit at 26 percent.
(I am stressing the word “credit” to drive home the point that this is not a deduction from your income, only benefiting you at the percentage of your overall tax rate. No, this is a tax credit, which
means it is deducted from your overall federal tax bill dollar for dollar!)
So...if you have yet to install a photovoltaic system on your home you can still cash in on this tax credit in 2021. Credits are available to the PV system owner and the PV system must be installed by December 31, 2021 to take advantage of the credit on your 2021 taxes. However, if your credit exceeds your tax amount, it can be rolled over as long as the credit legislation is in effect. Note that this credit is scheduled to decrease to 22 percent in 2023 and to 10 percent in 2024.
The super good news: The Solar Initiative has increased its subsidy on roof-mounted PV systems that we install from $800 per KW to $1200 per
KW. On a straightforward installation, this amounts to a subsidy of about 22.5 percent. (Maximum limits apply.) So by adding the subsidy with the credit, you can have a PV system on your roof at just about half off the regular price.
The bottom line: Now is the time to sign up for a PV system. Contact Tony Pappas at (508) 272-8822 to get on our list for proposals and job scheduling.
Although we have not been able to secure a grant under this program, the State of Rhode Island offers an additional subsidy of 85 cents per watt. Go to CommerceRI.com for more information and to determine if you qualify.
Note: Although all the information in this article is believed to be 100 percent accurate, you would be wise to confirm this data and determine your specific benefit by checking with your accountant
or tax attorney.