We’re all-too-familiar with the stress that April brings when we have to file our dreaded taxes. But wait, it’s only September. Why are we talking about taxes now? Simple. If you’re interested in taking advantage of the 30% federal solar tax incentive on your 2018 taxes, you need to act now!
To qualify for the lucrative 30% solar investment tax credit, and/or the $1,000 Arizona solar tax credit, your system must be fully installed and commissioned by your local power utility by the end of the tax year you wish to file for. So, if you’re looking to start reaping some of the early financial benefits of solar on your 2018 taxes, don’t wait!
Here are three reasons to start your solar journey today if you want the quickest return on your solar energy investment.
1. 30% Federal Investment Tax Credit
The ITC is a great way to make your solar energy system more affordable. With this incentive, you can take a tax credit off your personal income tax return for 30% of the solar system cost with no cap. This can be taken all in the first year or spread out over the maximum of five years.
The ITC is scheduled to ramp down starting in 2020, so it’s important to take advantage of the higher incentives while they last. This 30% credit is available through the end of next year (2019) then lowers to 26% in 2020, and then 22% in 21 before ending permanently ending by 2022.
2. $1,000 State of Arizona Tax Credit
At the state level in Arizona, not only is there no sales tax charged on the purchase of a solar energy system, but you can also receive a state income tax credit of up to $1,000 for a solar purchase. Like the federal ITC, in order to qualify for the Arizona solar tax incentive, your system must be installed before the end of the tax year you wish to file for.
3. Installation Timelines
Just as Rome wasn’t built in a day, a residential solar energy system isn’t installed overnight. From HOA paperwork to permits and utility commissioning, there are many outside entities involved with a solar installation. Your chosen solar installation partner should handle all of this for you, but each outside entity has a backlog and schedule all their own. A good rule of thumb is to lock in your solar contract by mid-October to ensure that you’ll have enough time to complete the design, installation and commissioning processes before year end.
If you’ve been thinking about solar, now is the time to act to lock in your tax incentives! Contact one of our solar experts for a custom solar quote. If you aren't quite ready for a quote, you can download our complimentary whitepaper: Is Solar Right for You?