Redrocktaxes's Weblog

Solar Energy Credit

A solar energy credit has been available for several years, but both the residential credit and the business credit are due to expire on December 31, 2016, so if you want to take advantage of either of them, act fast!

The residential credit is available for homes within the United States. The home does not have to be your primary residence, but a rental property will not qualify. The credit is 30% of the cost of the solar equipment that is installed on your home and includes solar water heaters.

For commercial buildings, there is also a 30% credit until December 31, 2016; thereafter the credit will drop to 10%.

These credits are a dollar for dollar reduction in the tax owed, and, if they cannot all be used in the year the solar system is placed in service, they can be carried forward to use in future years.

Investing in solar energy is a great way to both help reduce our use of fossil fuels and save substantial amounts of tax.