The average cost of a 5kW solar power system ranges from $15,000 to $25,000.
If you’re anything like the average American, you can’t afford to pay this amount upfront. Indeed, the high upfront cost of solar panels is the primary reason many Americans aren’t going solar.
But then, solar power has big benefits. It can, for instance, cut your home energy bills to zero, assuming you’re going 100 percent solar.
If you’d love to go solar but the high cost is preventing you, we’ve got good news. Keep reading to learn how you can make significant solar panel savings.
- The Federal Solar Tax Credit
The federal government knows the importance of solar power on the economy and the environment and is incentivizing businesses and homeowners to go solar. This is why it’s offering the federal solar tax credit, also known as the investment tax credit (ITC).
In 2021, and until 2022, you have the chance to deduct 26 percent of the cost of your solar power system from your federal taxes. This translates to big savings.
If your solar power system costs you $15,000, inclusive of the cost of solar panels and installation, you’ll have a $3,600 tax deduction. As such, the net cost of your solar power system will be $11,400. This tax credit is for both residential and commercial installations.
In 2023, the tax credit will fall to 22 percent for both homes and businesses, and 10 percent in 2024 for businesses.
So, if you’re a homeowner who wants to get solar power, now is the best time to make the most of the federal solar tax credit. If you wait beyond 2023, you won’t be able to make any tax deduction.
- State-Specific Solar Incentives
In addition to the ITC, several states offer a similar incentive. The incentive varies from state to state, though, so the amount of solar panel savings you’ll make will depend on your state of residence.
In Colorado, for example, renewable energy equipment, including solar panels is tax-exempt. This means the cost of solar panels is lower compared to what it would have been if it were subject to sales and use tax.
There’s also the property tax exemption for residential renewable energy equipment. This means you won’t pay any additional property taxes should your house gain value after the installation of a solar power system.
The net metering program in Colorado also ensures you’re paid for any extra electricity your system generates.
What’s more, there’s no shortage of competent solar dealers in the Centennial State. Just search solar companies near me on your browser and you’ll get several hits.
- Dealer Incentives
Solar dealers also offer a wide range of incentives.
Some offer cash rebates, for example. Others have a per-kW rebate. Some offer great discounts on solar panels and others can allow you to pay for your system in installments.
Research various dealers and know the incentives they’re offering before making a pick. You want a dealer who enables you to save as much money as possible.
Make Big Solar Panel Savings
Solar power offers big benefits, but the high upfront cost of solar panels can deter you from going solar. Not if you’re determined to make solar panel savings, though! With this guide, you now know the various ways you can save money on your panels.
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