Tax Minute

SOLAR PANELS

As you drive around the Commonwealth you will notice that more and more houses have solar panels on the roof or a solar field in the yard. The main reason many people put solar panels on their homes is because it is more environmentally friendly then using fossil fuels to generate electricity, but did you know that there are massive Federal tax credits for installing solar panels? There is a tax credit available to homeowners who install "alternative energy equipment" that is currently equal to 26% of what the homeowner spends on qualifying property such as solar panels, solar hot water heaters, geothermal heat pumps, and even wind turbines. The credit is on both the material and the labor costs to install the property. The credit was 30% and is being substantially lowered. In 2021 it is reduced to 22%, and for 2022 and thereafter it is 10%. So if you were thinking about installing solar panels you should look into it now to ensure that you can get them installed before the end of the year to take advantage of the larger credit.

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