There’s never been a better time to switch to a renewable energy source with the current federal tax credits being offered. Not only do you have the chance to switch to cleaner, more sustainable energy, it can also save you money.
In fact, in the latest Going Solar in America Study, researchers found that solar rates are going down while other utility rates are going up and are expected to continue to get more expensive.
Don’t miss your chance. Keep reading this guide and discover the current federal tax credits offered to help you save money.
1. Federal Solar Tax Credit
One of the most exciting tax credits being offered is the federal solar tax credit. The credit was just extended in December 2020 and provides a 26% tax credit to individuals that get solar panels installed before December 31st, 2022.
If the unit is installed after that date and before December 31st, 2023, then you are still eligible for a 22% tax credit. After that date, there is no incentive being offered. You can see why so many people are taking advantage of the incentive now because it will only decrease in the future.
If you plan to get solar installed, make sure to go with a quality solar installer, such as Blue Raven, to ensure the job gets done the right way the first time.
2. Federal Electric Vehicle Tax Credit
The Federal EV tax credit is also being offered for individuals that purchase electric vehicles. The current tax credit is up to $7,500 and can vary depending on the vehicle purchased.
The other thing to consider is that you will not be owed an additional refund if the tax credit goes beyond what you owe in taxes for the year. For example, if you owe $6,000 in taxes, you will not receive the additional $1,500.
The federal hybrid tax credit is very similar in terms of the rebate. Depending on the type of vehicle, it will determine how much of the credit is received. You will also not receive an additional return from the hybrid tax credit.
3. Residential Wind Farm Tax Credit
Like the solar panel federal tax credit, if individuals decide to install a residential wind farm, they are also eligible for a tax credit.
The incentive is offered for a 26% tax credit on systems installed before 2022. If the system is installed in 2023, then the tax credit drops to 22%. And after 2023, the wind farm tax credit is not being offered.
The same tax credit applies to other renewable energy sources cush as biomass heaters, geothermal pumps, and anything else considered “renewable energy.”
Take Advantage of These Federal Tax Credits Now
If you have been on the fence about going with renewable energy, these federal tax credits should give you an incentive to get them installed sooner rather than later. The longer you wait, the less tax credit you will be eligible for. And if you wait too long, you may not receive any incentive at all.
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