Will the Government Pay for Solar Panels?
If you’ve spent any time on Facebook, Instagram, or TikTok over the past few months, you’ve probably seen ads claiming that the government is giving out free solar panels. While we wish it were true, this is not the case—any ad promoting free solar panel installation is almost definitely a scam.
But as with most lies, there is a little bit of truth in this one. The government won’t pay for you to get solar panels, but it does provide tax incentives to make solar panel installation more affordable.
Keep reading to learn more about government solar incentives and how they can help you save on residential solar panels.
Federal Solar Tax Credit for Solar Panels
The federal government offers a tax credit, known as the residential clean energy credit or solar tax credit, for solar panel and battery storage installation. The solar tax credit reduces your federal income tax liability by 30% of your solar installation costs for the year you install your system.
The tax credit is not a cash rebate or a tax reduction—it’s a dollar-for-dollar reduction in the amount of income tax you would otherwise owe. You can think of it like a coupon that’s worth 30% of your solar installation costs and can be applied to your taxes, reducing what you owe. So, if you spend $10,000 on your solar installation, you’ll receive a $3,000 credit. If you owe $4,000 in taxes, you can apply your credit and reduce your tax liability to $1,000.
The Solar Tax Credit in 2023
The solar tax credit has been around for a long time—it was first introduced in 2005. It’s been adjusted several times since, most recently by the Inflation Reduction Act. The Inflation Reduction Act increased the tax credit to 30% and extended it until 2035. The tax credit will, however, be reduced to 26% for systems installed in 2033 and to 22% for systems installed in 2034. If you wait too long to go solar, you could miss out on savings! Find out how to claim the solar tax credit in 2024.
Are You Eligible for the Solar Tax Credit?
As long as you meet the following criteria, your solar installation is eligible for the federal solar tax credit.
- Your solar panels are located at a home you own and use as a residence in the United States
- You own your solar panels (cash and financed systems qualify, PPAs and leases do not)
- The solar equipment is new or being used for the first time
Most residential solar panel installations in Arizona meet these criteria, including off-grid solar installations. When you go solar with SouthFace Solar & Electric, we can help ensure your project meets the solar tax credit’s eligibility requirements.
SouthFace Solar & Electric Is Your Arizona Solar Expert
SouthFace Solar & Electric is the Arizona solar expert you can trust with your home solar installation. We are a local Arizona company that’s been in business since 2008 and we’ve helped hundreds of homeowners make the switch to clean solar energy. If you have any questions about government solar incentives and how they can help you save money on solar panels, just give us a call. We can walk you through the solar incentives available to you, including the solar tax credit, to make your solar panel installation as affordable as possible.
