Invest at Home: How to Maximize Savings with the Solar Tax Credit

Timing is everything when you’re thinking of purchasing a solar system for your home. It may sound like a great marketing pitch but, hey, it’s true. If you want to get the most savings on your solar install… now is the time to start exploring your options. The biggest incentive out there today, the Solar Tax Credit, or Investment Tax Credit decreased from 30% to 26% in 2020. It will step down just once more (to 22% in 2021) before dropping to 0% permanently for residential solar installations (a 10% solar tax credit will remain for commercial solar systems).

Solar Tax Credit – How does it work?

The solar tax credit is applied to your federal income taxes as a credit, and it reduces (or eliminates) what you owe. It’s not a refund or a deduction. Anyone who purchases a solar installation on their home or business is eligible to claim the tax credit. However, you must have a tax liability to claim the credit. You can claim the credit over more than one year. In doing this you carry any leftover amount forward into the next year.

If you have any questions or need more clarity, our Solar Consultants are ready to chat with you about the solar tax credit. As you likely assumed, we are not tax experts, so we will ask you to reach out to your tax professional for any questions related to your specific tax liability.

Too early? Think again!

To claim the 26% tax credit, you must act quickly as our end of the year queue is filling up! If you purchase a residential solar system in 2020 and it is installed in 2021, you would only be eligible to take that year’s tax credit (22%). So, your system needs to be installed in 2020 to be eligible to claim the full 26%. (Heads up for business owners: the rules are slightly different here for commercial projects).

Ohio Incentives & Additional Offers?

Unfortunately, there are no statewide or local solar incentives available in Ohio. Loan options vary from solar company to company. Various finance partners have different programs and different rates (and different hidden fees baked into the price). Most solar installers in Ohio offer $0 down loans. Like them, we can offer you zero money down with any of our term loans. This is a great option for those that want to go solar but don’t want to tap into home equity or savings.

Choosing a Solar Installer in Cincinnati Ohio

Nathan Scott began the process of choosing a solar installer in Cincinnati Ohio back in 2016. At that time, Nathan and his family had just moved to Montgomery, a suburb of Cincinnati, and began to settle in. Read more to learn about this journey and how he chose a solar installer in Cincinnati, Ohio.

Motivation

This initial investigation was motivated by Nathan’s budding family. He and his wife had two young children and noticed their carbon footprints increasing. They were buying more food, doing more laundry, and driving bigger cars. His family was using more energy overall, and his primary motivation was to go green and tread a little lighter. With his kids in mind, he thought about where the climate would be 40 years down the road. Going solar was a way that he could contribute to the renewable energy solution.

When asked about the financial aspect of his solar purchase, Nathan said that economics played a part in his choice to go solar. He likes knowing that there is a known return on investment. The added value in his home is another financial bonus. If his family ever does sell their home, free electricity is a compelling selling point.

What He Learned

Nathan says that he learned a lot throughout the whole solar journey. Like many shoppers, Nathan got quotes from several solar installation companies. How did he choose a solar installer in Cincinnati, Ohio? He found that the two companies he worked with had different philosophies when designing a solar system. The first company he had out proposed a huge system, maxing out his roof with panels. They posited that if you’re going to go solar, you might as well go huge. The proposed 34-panel system would have made it more expensive, but given the family more solar production. Kokosing Solar proposed Nathan go with a 21-panel design to offset 50 % of his annual consumption. At the time, Nathan felt that the smaller system seemed to be just the right size.

Choosing a Solar Installer in Cincinnati, Ohio

  • The design – Since installation, he realized that the additional 14 panels proposed by the other company would have been largely shaded by trees and other roof obstructions. He understands how our designers laid out the roof array to maximize the areas with the most sun. He has two big trees in his yard, and the roof array was designed to avoid their shading.
  • The gutters—In the years since installing the array, Nathan has noticed that cleaning the gutters is much easier than it would have been with a roof entirely covered in panels up to the very edge.
  • The electric panel—Another expense the family avoided when going solar was upgrading their electrical panel. The inverter’s output was right at the line, so they did not have to upgrade the panel, which was a big saving.
  • The panels—Nathan liked the last thing about Kokosing Solar’s proposal was the look of the panels themselves. Kokosing Solar’s standard solar panel offering is a black panel with a black frame, which some homeowners prefer over blue panels with silver frames.

Looking at the data, the annual solar projections are 100% spot-on, which Nathan is pleased with. His family has completed some energy-efficient home upgrades like adding energy-efficient lightbulbs and installing a new central air conditioning unit, as well as adding an electric car, the Tesla Model 3. His solar panels are either meeting or exceeding their proposed annual energy offset for his household.

Between our designers knowing exactly where to place the panels and our consultant’s earnest listening to the family’s true solar goals – Nathan got the solar system that he wanted installed on his family’s home in fall of 2017.

What He Likes Most

  • It more than offsets all of the AC use, Nathan says: “It’s like we have AC that doesn’t cost anything to run. You’re at your highest solar production when you need the AC and we’re reducing that load on the grid.”
  • Monitoring – With Solar Edge optimizer monitoring Nathan can see each panel and its production. Nathan looks at the monitoring software frequently – he says he doesn’t need to but it’s fun to track.
  • The system runs itself and doesn’t need anything.
  • Record solar production this year, from July 2019 – July 2020. The past 12 months have been sunny!

Advice to those shopping

His advice to those thinking of going solar? “The cost is similar to a used car, but this will last 25-40 years. It was a no-brainer for us. I would be glad to spend this money on something that will last this long. If you think about other things you might spend this kind of money on – this is one of the only ones that will pay you back.”

Nathan says that in the summertime a lot of people just come up to his house and ask questions about it. We love to hear that – it confirms our suspicion that there are so many homeowners out there who are curious about solar. It just takes one neighborhood leader to spark that interest in others.

Lastly, Nathan notes that there was a lag time between contract signing and installation. So, if you’re thinking about going solar (especially in 2020 to get the full 26% federal tax credit!) start now because it will take a while before the date of your solar installation.

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