Solar power systems are no longer as expensive as they used to be, thanks to government-approved incentives and rebates. In fact, according to the National Renewable Energy Laboratory, there was a 12.3% drop in price for PV systems between 2020 and 2021. No wonder the number of commercial solar panels in Florida has seen a surge in recent months.
If you are thinking of switching to solar energy in Florida, there is no time like the present. Learn more about the solar tax credit programs available that can help make installing solar panels for homes in Florida affordable.
In this article, we’ll explain what these tax benefits are, which ones apply to you, and most importantly, how Tesla Powerwall home battery systems in Florida can help reduce your energy expenses.
Types of Solar Incentives & Tax Breaks
There are several different types of state and federal solar tax credit incentives available to homes and businesses in Florida that have installed PV panels on their property. Some of these are tax credits, government rebate and incentives for businesses, but here we’ll focus on the main ones.
State Tax Credits
The first type is the solar panels tax credit provided by the state government in exchange for installing solar panels. The amount of the credit varies from state to state. In Florida, it is known as Solar and CHP Sales Tax Exemption and gives a 6% sales tax exemption on PV installations.
With cash rebates on solar, you get money back from your utility company when you install a solar panel energy system on your home or business. The amount of rebates for solar panels is based on the size of your system and the number of years your system will be producing energy for you.
Solar Renewable Energy Credits (SRECs)
SREC programs allow you to sell excess renewable energy credits (or RECs) to your municipality or the utility companies in your area. These RECs are designed to encourage businesses to adopt clean energy technologies like solar power systems. Selling SRECs can bring in hundreds of thousands of dollars as income every year.
Performance-based incentives (PBI) are designed to encourage the use of renewable energy by paying you a flat rate per every kilowatt-hour of electricity your system generates. PBI payments depend on the net metering agreement between you and your utility company.
Incentives for Businesses
This one is for business owners. Using the Modified Accelerated Cost Recovery System (MACRS), business owners can write off the cost of their PV system installation. This not only reduces the burden on the business but also helps accelerate the ROI. In most states, businesses can recoup the cost of installation within a five-year period.
Subsidized loans are available to people who want to install PV panels on their property. The state, utility company, or an NGO will provide a certain amount of money to cover the cost of installing the panels and you can pay off your loan over time at a reduced interest rate.
In some municipalities, solar power systems are eligible for tax exemptions when property taxes are being accessed. This means that while switching will definitely boost the value of your home by more than 4 percent, this increase will not reflect in your property tax bill.
The Federal Solar Tax Credit in 2022 Explained
The federal solar tax credit is one of the biggest financial incentives for PV power in the United States. This investment solar tax credit also known as the ITC allows you to deduct 26% of the cost of your installation from your federal taxes. So, if you install a $10,000 system, you can get a $2,600 tax credit. The solar tax credit is available for both residential and commercial installations.
The ITC is set to decrease to 22 percent in 2022 and then expire completely in 2023. However, there is still a chance that it could be extended beyond 2023.
How Much Does It Cost To Go Solar?
There are a few different factors that affect the cost of a PV installation, including the size of your system, the type of panels you choose, the climate you live in, and more. On average, a 5kW system will cost around $15,000 before any incentives for solar. But the cost will vary depending on your specific situation.
If you’re thinking about going solar, the best way to find out how much it will cost you is to get a quote from a reliable firm like PPM Solar. They will be able to assess your situation and give you a more accurate estimate.
How can PPM Solar help?
At PPM Solar, we know that making the switch to renewable energy can be a big decision, and we want to make sure you have all the information you need to make the best decision for your needs.
We’ll help you understand the potential cost savings, solar federal rebates, the environmental impact, and the different types of panels available. We’ll also answer any questions you have about the installation process, maintenance, solar tax incentives, and more.
Ready to get started? Contact us today to schedule your free consultation.