What You Need to Know About the Solar Tax Credit in 2020

Solar TaxCreddit

As Tax Season approaches and we get ready to collect our W2s and 1099’s, we also look for expenses we can deduct so we pay as little in taxes as possible. One of the ways to get a significant tax credit is to go solar. The Federal Government is currently offering a Solar Tax Credit, also known as the Investment Tax Credit (ITC). If you pay income taxes you are almost certainly eligible to take advantage of this credit, whether you are a homeowner or a business owner. Best of all there is no cap to the credit you can receive.  In this blog post we will dig deeper into the 2020 Solar Tax Credit and explore its benefits and limitations. 

History of the Solar Tax Credit

The Investment Tax Credit was first put into place through the Energy Policy Act of 2005. This federal policy caused a surge in popularity of solar energy installations in the U.S. and created hundreds of thousands of jobs in the industry, helping the American economy. The federal tax credit was supposed to decrease to 10% in 2015 for all solar systems, but thanks to the overall popularity of the credit, it was extended for another 7 years! Due to the increased popularity of this credit, the amount of homeowners installing solar panels on their roofs have been growing exponentially every year! 

Homeowners who were able to install their systems in 2019 qualified for the 30% Tax Credit. The current value of it in 2020 decreased to 26%. That number will drop to 22% next year, only to phase out completely in 2022 for residential systems. However it will remain permanently at 10% for commercial solar installations.  That being said, there is still time for homeowners who did not look into the benefits of going solar to take advantage of the ITC. We are actually curious to see what will happen to the credit when 2022 knocks on our door! 

What is the Solar Tax Credit?

The federal government allows homeowners who purchase solar systems to deduct 26% of the value of the system on their tax returns. If the system is leased, you are unable to claim this credit. The Solar Tax Credit is based on the tax liability of the homeowner. Basically the IRS will not refund you more than you have paid in taxes, but thankfully the credit can rollover to the next year. For example, if you solar system cost $30,000 before the tax credit, you are eligible for $7,800 (26% of the total gross cost) in Tax Credit. Now, if your tax liability is $6,000, then you will get $6,000 the first year, and will be able to roll over $1,800 for the next year. If your tax liability is higher than your tax credit you will get a full credit the same year.  

How can you claim the tax credit?

If you purchased your system in 2018, then your tax credit form would have to appear on your 2018 Tax Return. The same is true for systems purchased in 2019 except you would be filing it now. In order to claim the tax credit, you or your CPA will have to fill out form 5695, which you can access here. In order to properly complete the form, you will need a paid receipt for your installation. The solar company you purchased your system from should be able to provide you with that. Then, you and your CPA can fill out the form, which is fairly simple and straightforward.  After filling the form out, you will then add the credit to the appropriate Credit portion on your 1040 form. In the new form case, the solar tax credit will go to Schedule 3 on your 1040 form.

What happens with the credit that was unclaimed?

If you filed your 5695 form in 2018, and your tax liability was lower than your tax credit, you have a remainder credit that needs to be rolled over to your 2019 tax return. REMEMBER to do that so you do not lose your credit. This credit was placed on the form in number #12. If you are filing now, and will not be able to claim the full credit make sure that your CPA places the roll over credit in line #16. 

 If you forgot to claim your Tax Credit last year, make sure to speak to a Tax Professional who can amend your tax return for the past 3 years. That money is YOURS, do not give up on it! 

Join The Solar Community

The tax credit is now in effect, and is set to expire in 2022. Make sure that you take advantage of this opportunity and lower your overall cost as much as you can. Make sure that the credit is claimed for the year that the system was completed. The Sun is there for all of us everyday, and it will not charge us to use its sun rays to generate electricity for years to come! Take advantage of it and start Saving! 

If you have any other questions or you need help filling your Tax Credit, let us know so we can help!

 

EMAIL  office@solartimeusa.com 

CALL OR TEXT  972 675 7725

The 3 Types of Solar Panels: Know Your Options

types of solar panels

What Are The Three Types of Solar Panels?

The three types of solar panels are monocrystalline solar panels, polycrystalline solar panels, and Amorphous solar panels. Today’s Solar Panels can be traced back to the 19th Century when Alexander Edmond Becquerel discovered the photovoltaic effect and explained that we can generate electricity from sunlight. It then took us 100 more years to invent a solar cell! Shortly after that, we started using solar energy to power Space Satellites and now the International Space Station. Nowadays, solar cells can be produced in a few different ways, providing homeowners with choices. See below the three most popular types of solar panels used by Dallas solar companies and what differentiates them. 

types of solar panels

Monocrystalline Solar Panels (Mono)

Out of the three types of solar panels, Monocrystalline solar panels are made of monocrystalline silicon. They are the most commonly used solar cells in the residential market.

Thanks to their silicon’s purity, these solar panels are very productive. Their efficiency rate is around 20%. When it comes to high temperatures, the monocrystalline silicon makes the panels incredibly durable and efficient, which slightly influences higher prices. Additionally, the Mono-Si panels have a high-power output and a lifespan of more than 25 years! 

Polycrystalline Solar Panels (Poli) 

The polycrystalline panels are made by melting raw silicon, which significantly reduces their production time and price. Their efficiency rate is slightly lower than monocrystalline panels,  around 16% and (like Mono panels) will last for over 25 years! They are produced differently, so their look differs from monocrystalline panels: they have a blue, speckled look to them. While they may look different, these panels are just as good as monocrystalline panels and are commonly used in the commercial sector. 

Thin-Film: Amorphous Silicon Solar Panels 

Amorphous panels are produced by placing materials like silicon, copper or cadmium onto a base. The surface color can either be dark blue or black. In comparison to the other types of solar panels Mono and Poli, this kind of panel is cheaper because their manufacturing utilizes less material. Also, thin-film panels are often used for smaller solar power installations and are very flexible, which makes the application highly manageable. They have a lifespan of about 15 years and their efficiency rate reaches 10%. Consequently, you need twice as many amorphous panels to generate the same amount of power as monocrystalline panels.

The table below shows a comparison of three types of solar panels: monocrystalline, 

polycrystalline, and thin-film.

types of solar panels

These three most common types of solar panels are all advantageous for different reasons, and anyone of them may be the best for your specific needs. For your questions regarding the switch to Dallas solar or about which of the three types of solar panels may be best for you, contact Solartime USA today.

Looking for more information on solar panels? Get a solar panel 101 run down on how they work and the benefits they bring!

How the 2019 Federal Solar Tax Credit Works and What You Need to Know

solar tax credit 2019

Solar energy not only helps save the planet, but it can also help you save money!

Did you know that once you install solar panels on your home, you’re eligible to claim a third of your total setup costs on your tax return? For anyone who’s on the fence about switching to solar from traditional power grids, reaping the benefits from the Federal Solar Tax Credit could be just the thing to sway your decision. 

Here’s what you need to know in order to do it right: 

Understanding the Federal Solar Tax Credit

As mentioned above, the Federal Solar Tax Credit (or the Investment Tax Credit) allows you to claim 30% of your total solar installation, licenses, and equipment costs on your Federal tax return. 

This means that if you wind up spending $15,000 altogether on your new solar system, you’ll essentially save $5,000 on your taxes the next year. In fact, research shows that the average solar shopper in 2019 saves around $5,000 just by switching to solar and taking advantage of the current program.

This opportunity was originally introduced in 2016, and Congress has since extended the tax credit to 2022 for homeowners to take advantage of in hopes to promote sustainable energy consumption. However, this deal won’t be around for long.  

How the Federal Solar Tax Credit Will Change Over the Years

Unfortunately, the Federal Solar Tax Credit only has a lifespan of 5 years. Not to mention, its value depreciates the longer you wait. 

The amount that you can deduct from your following year’s taxes becomes less and less with each passing year. Here’s a quick breakdown of the payout differences:

  • 2019: If you purchase solar panels within the year, you can enjoy the full 30% tax credit on your entire system installation. Now is the time to buy since 2019 is more than halfway through!
  • 2020: Anyone who makes the change to solar energy can enjoy a 26% tax credit off their total cost.
  • 2021: A little late to the game, but homeowners and commercial business owners can still claim a 22% tax credit on their solar panel system from Uncle Sam. 
  • 2022 and beyond: At this point, only commercial solar energy buyers can claim a modest 10% tax credit on their solar setups. Residential homeowners are out of luck. 

Although the deal starts to wither, the U.S government does give buyers a little breathing room to get the job done and reap the rewards. For instance, changes to the program have made it so that people can claim the tax credit immediately after construction and installation is finished. The only catch is that solar systems have to be fully operational by the end of 2023. 

Knowing if You’re Eligible for the Federal Solar Tax Credit

Combing through all this information concerning timeframes and percentages may seem a bit overwhelming, but knowing if you’re eligible for the Federal Solar Tax Credit and claiming benefits is pretty straightforward. 

Essentially, the only stipulation that determines your eligibility for the Investment Tax Credit is whether or not you own your solar system outright. This means that, if you happen to lease your solar systems through a solar energy provider, you do not own the equipment. Therefore, you’re not eligible for any kind of tax credit. 

On the other hand, if you do own your system, great! Claiming your solar tax credit is as easy as informing your year-end accountant about your purchase and giving them the proof, or if you use a virtual tax filer (TurboTax, H&R Block), you can simply plug in the credit and watch your savings roll in. 

Working with a Solar Professional Can Help

Whether you’ve already made a solar system purchase or you’re considering taking the plunge, working with a solar professional can help make the process a lot easier. 

For those with a setup in place, don’t hesitate to reach out to your provider to ask questions and gain valuable insights so that you can get the most out of your energy plan. From product issues to general questions, an expert-level solar provider should assist you with any problems so that you can live a better life with a sustainable peace of mind. That being said, if solar energy is new to you, then feel free to contact a professional at SolarTime USA to learn more. 

Their mission is to always put the customer first. Serving over 21,000 families and businesses throughout the U.S. and Europe, you can trust that your solar needs will be met with the utmost care, and most of all, the greatest affordability. 

Reaping the benefits of the Federal Solar Tax Credit is just one aspect of how solar energy can benefit your home, so visit Dallas Solar Company SolarTime USA today and start making a difference for the future.

 

Solar Panel Appraisal Value: Do Solar Panels Increase Home Value?

solar panel appraisal value

Do you know about solar panel appraisal value and how it can increase your home’s selling price and decrease your electricity bills?

You might not be moving and selling yet, but it’s worth to be aware of what value your home could gain with solar panels installation added to it. In this blog post, we will explain how solar panel impacts your appraisal value.

Solar Panel Appraisal Value

According to the study by the Lawrence Berkeley National Laboratory, people who are looking for a new home have been willing to pay more for a property with the solar system already installed. The study examined about 23,000 home sales during 13 years of home sale data. The findings showed that homes with solar panel installation are more expensive by an average of $4/Watt more than homes without solar panels.

Cash Purchase

Customers who purchase solar panels with cash are fully owning their system. In this case, a system is considered as a part of the property and it raises the value of the house.

Financing

Solar Panels financing through a loan that has since been paid in full means that you are now the owner of the system. If your solar panel system is financed via an unpaid loan, you are obliged to make monthly payments to cover your debt, ownership depends on the contract signed with the lender. Selling your home with the solar loan increases the value of your property and thanks to the additional revenue you may pay off the loan. In some instances, you may also choose to pass on the solar loan to the new home-buyer, without increasing the sale value.

Lease

Leasing the solar panels allows the homeowners to pay for the right to use the solar system for a defined period of time, but they are not the owners of the system. The system belongs to the solar provider. When you are ready to sell your home you can pay the rest of your lease and sell the solar system to the new homeowner. There is also a possibility to transfer the lease to the buyer, provided that the new property owner wants to take over the lease.

How Solartime Can Help

We are aware that solar panel installation is a long-term investment so we want to make it more simple and straightforward for all families.  If you decide to sell your home with a solar loan, we can help you transfer it to the new homeowner. We can also assist you in moving your solar panels to your new home. We are here to help you in the best way we could.

Should you have any further questions about this, do not hesitate to contact us at 972 675 7725 or office@solartimeusa.com

Do Solar Panels Work on Cloudy Days & Other Weather Conditions?

Do Solar Panels Panels Work During Cloudy Weather

Solar panels are very adaptable to different weather conditions and are installed all over the world, in places such as the below-freezing temperatures of Alaska and the searing heat of the Sahara. If you are thinking about how solar panels work on cloudy days, it is crucial to understand how the weather may affect their efficiency and output. Let’s take a look at different weather conditions and how they affect the solar production.

Do Solar Panels Work on Cloudy Days?

Yes, solar panels will still generate electricity on cloudy days, just about 20-30% of its full capacity. As a result, clouds reduce the amount of sunlight that reaches your panels. Solar panels are designed to use direct and indirect sunlight to generate electricity. No worries, you are still producing power even when the clouds are up there!

Do Solar Panels Work In The Cold?

Solar panels’ production is more reliant on the amount of the sunlight that reaches the panels, than the temperature of the air surrounding them. However, since we are dealing with electricity, it is known that as the panels get hotter, they produce less energy even with the same amount of sunlight. The panels are tested at a temperature of 25 degrees C- about 77 degrees F, and heat can reduce that efficiency by 10-25%. That’s why the best production months for Texas are during spring and fall when days are already long, but the temperature is mild!

How About Rainfall?

Solar panels produce electricity even on rainy days due to visible sunlight getting through the rain. Rain is beneficial for solar panels, as it helps to keep your panels operating efficiently by washing away dust, pollen, birds’ droppings, and or debris. So rainy days are solar-shower days!

And Snowfall?

A little bit of snow, as in the case of rain, can be useful for cleaning solar panels. The sunlight can still pass through a thin cover of snow. Designers always install solar panels at the most effective angle to help with sun reflection and the fall of snow if needed. Fortunately, we do not have to deal with this as much, here in Texas!

Solar Panels in Hail

Solar panels could possibly be damaged by a heavy hailstorm, but it is very rare. Fortunately, if it happens, any potential damage caused by severe weather conditions would be covered by your homeowner’s insurance, just like your roof. Solar Panels are tougher to break than your roof, so you can sleep calmly! Don’t worry about solar panels and hail – panels will withhold the hail and if not we will work with your insurance to fix them if needed!

Solar Panels In The Wind

Most solar panels can withstand winds up to 100mph. Every solar installation is firmly attached to the roof. The panels must be properly mounted to a sturdy, immovable surface to pass the final inspection.

If you still have any questions regarding the performance of solar panels or are looking for solar panel installation share your questions with us at office@solartimeusa.com or call/text us 972 675 7725.