There is a lot of information and clean energy incentives to encourage you to switch from fossil fuels to solar. Does this make sense? More and more homeowners and commercial property owners are looking closer at solar energy. With the increasing cost of electricity and the urgency to reduce carbon emissions, solar power seems like a no-brainer.

 

But before diving headfirst into solar, it's important to understand the tax credits available for residential and commercial properties. For residential properties, the Solar Investment Tax Credit (ITC) is available for qualifying homeowners. The ITC was recently increased from 26% to 30% and can result in reduced or zero tax liability.

 

For example, a $30,000 solar system could yield a $9,000 tax credit. Additionally, solar systems increase home value by producing income and reducing electricity costs. The ITC is also available for commercial properties, but the percentage differs. Currently, the ITC for commercial properties is 26%, but it will decrease to 22% in 2023.

 

However, commercial property owners can also take advantage of depreciation deductions on solar equipment, which can further reduce tax liability.