Federal tax credits for the installation of solar power equipment remain in effect, and there is significant money to be saved.
This guide to the Federal solar investment tax credits gives you what, how, and how much can be saved when you install solar electric panels or BiPV solar tiles aka solar photovoltaics or a solar hot water system on your residence. Saving money at tax time has never been easier – and this is a very good time to consider going solar.
What is the Federal Solar Investment Tax Credit?
Since Congress passed the Energy Policy Act of 2005, the Residential Renewable Energy Tax Credit has allowed homeowners to deduct a percentage of the installed cost of a solar PV system for their home. It was originally set to expire after 2007 but has since been extended several times. The current expiration date is December 31, 2023. Will it be extended again? Probably, but it’s a risk to wait.
PV solar panels for residential roofs are in like never before, thanks to the fact that going solar has never been easier or more affordable.
The Price of Going Solar Has Decreased Dramatically Over the Past 10 years
In fact, in 2021, most homeowners working with small local installers are paying between $2.80 and $3.20 per watt to install a new solar panels system before the 26% solar tax credits in 2021 and 2022 (26% in 2023).
The national average total cost for a typical 5kW PV solar power system is $14,800, when installed by a small local installer, before the 26% tax credits in 2021-2022 (26% in 2023).
Did you know? In 2008, the cost of a solar power installation was $8.82 per watt.
Using the US average for a residential PV solar panels system size at 5 kW (5,000 watts), a new solar system cost will be $10,952, after the 26% tax credits in 2021 and 2022 (The solar tax credits will be reduced to 22% in year 2023). — That’s a rather attractive price range for residential solar energy compared to the recent past.
So, should you jump on the solar bandwagon and take advantage of the 26% solar investment tax credits available to homeowners in 2021-2022 (22% in 2023) right away, or are there other factors to consider before installing solar panels on your home?
There are several important factors to consider before calling a solar company and getting those panels up on your roof, if you want to ensure a long-lasting and regret-free solar installation:
So, you want to invest in a new roof with the latest 21st century technology and you plan to spend some serious coin doing so.
You are intrigued by solar power, but do not want to go the route of traditional solar panel roof installation — you want something a bit more pleasing to the eye.
Here is your conundrum. Would you rather go with a company that has been in the roofing business for over 100 years and cut its teeth on asphalt shingles or the company that comes from world of high tech and never put up a roof before the controversial acquisition of SolarCity.
To further complicate your decision-making the established roofing business is part of one the world’s largest home building products conglomerates that has been in business for over 350 years.
Tesla — the high-tech roofer?
It is part of one of the most eclectic organizations out there, whose owner is more interested in flying to outer space and boring long-distance subterranean tunnels than residential roofs.
Note: Tesla solar tiles are not really a viable product as of yet. Only a handful of these roofs have been installed so far. Future product availability guidance is murky at best and we don’t know if we’ll see the market ready Tesla solar tiles any time soon.
To help you divine an answer let’s take a look at the two players in question, the Apollo II Solar Shingle Roofing System from CertainTeed and the Tesla Solar Tile Roof.
Let’s address the elephant on the roof straight away. The cost of solar in 2021 has dropped to its lowest price since tracking began in 2014 — a national average of $2.96 per watt, when installed by a small local installer.
As with everything measured in the solar marketplace results can vary considerably depending on location.
In some sunny locales the cost of solar is down in the $2.80-$3.22 per watt ballpark. In most places homeowners can expect to spend between $15,000 and $27,000 for PV solar panels.
Tesla, whose first commercial roofs are just coming online, delivers solar for $9.60 per watt (after the recent 50% price hike)– more than three times the national average.
CertainTeed does not make pricing information public. Since the Apollo II system is more complicated to install than standard solar panels, but is not a pure roofing option like Tesla, it is safe to assume its price will fall between the two poles, probably skewing towards the higher end.
In addition to the variables of climate, final solar pricing is also dependent on house size, local public utility policies, and the existence or future continuance of solar investment tax credits.