It May Be the Best Time to… Go Solar!
It may be the best time to… Go Solar!
Although “Yesterday!” may be the answer to the question “When is the best time to go solar?”, there’s no better time left than now! The Investment Tax Credit (ITC), also known as the Federal Solar Energy Tax Credit, that allows one to deduct 30% of the cost of installing a solar system and has helped so many Americans go solar, lasts only until the end of 2019. After that it decreases to 26% in 2020, and then to 22% in 2021. From 2022 onwards there will be no solar tax credit for residential solar systems, just a 10% credit for commercial systems. Solar system owners can claim their tax credit when they file their annual federal tax return as long as the system is installed and working, or under construction with anticipated completion by end of 2023. If owners do not have the tax liability to claim the entire credit in one year, the remainder can be rolled over into the following years as long as the tax credit is still in effect.
Tax credits can only be taken by those who own, rather than lease, their solar system. Also, for anyone considering leasing a system, be aware of the long-term obligations that leasing brings. In particular, when selling your home, the buyer will likely be obligated to assume your lease payments.
In considering whether to go solar, it is important to consider both financial and environmental benefits. The combination of renewable energy and local generation brings the greatest environmental benefit. If you add “storage” (batteries), you can also benefit from an added degree of independence since you have the potential to go “off grid” in emergency or power shut-off situations. With or without battery storage, you will enjoy the net energy metering (NEM) electric rate with your system that protects you against future rate increases because you are credited with the electricity you generate at the same rate as you pay to buy it (provided that your generation over a year does not exceed your use over the year). To find out more about how NEM works, view the video from SCE.
Some things to bear in mind when thinking about going solar are: the condition of your roof, the amount of shading it gets, and its orientation to the sun. An unshaded roof oriented towards the south or southwest is best. If your roof will need replacement within the next 5 years, it would be best to do this at the same time that you go solar. (If you do both together, you can apply for the 30% tax credit for some of your re-roofing also.) A good general rule-of-thumb is that residents with an energy bill averaging above $100 a month should strongly consider solar, because they can likely install and finance a system that pays for itself in under 12 years. Evaluating the best options when it comes to sizing, designing, selecting an installer, and financing your system can be challenging, but there are many resources available online. Our website provides some FAQs for you.
Beginning in 2020, all new California homes under three stories will be required to include solar. Now might be the right time to join them!