If you are interested in solar panel installation in Oregon for your RV, van or skoolie, you may be wondering what kind of incentives or rewards there are for using solar energy. Good news – if you finish your system before 2032, you can take advantage of the highest tax credit! Our FAQ will go through the basics of this credit, how it works, and how much you can benefit.
What is the Solar Investment Tax Credit?
It’s an ITC or Investment Tax Credit offered by the U.S. federal government (which means it’s available regardless of the state you live in) that helps reduce tax liability by a certain percentage of the investment costs of a new solar energy project.
The solar investment tax credit is divided into two parts, one version for commercial entities that are installing solar installations, and one version for residential solar projects made by homeowners. Interestingly, the language clearly specifies that the installation can be on a “dwelling unit,” which means this can also apply to a variety of solar panel kits like van and skoolie solar systems or solar-powered RVs.
How Does the Tax Credit Work, and How Much Can I Save?
You are allowed to make a deduction from the full costs of a new solar project, for the tax year in which the solar project was started. This is where the details become important: The specific percentage of the cost you are allowed to deduct can vary over time, and is only applicable for certain years based on the current state of the program:
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2022 through 2032: Qualifying systems in place these years can qualify for a 30% tax credit.
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2033: Qualifying systems installed in this year will qualify for a 26% tax credit.
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2034: Qualifying systems installed in this year will qualify for a 22% tax credit.
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After 2035: At this point, the residential side of the solar investment tax credit is phased out completely, and homeowners will no longer be able to qualify for the credit.
Therefore, if you are interested in qualifying for this tax credit for something like an RV solar kit, it is important to consider starting soon.
What Do I Do To Qualify for the Tax Credit?
First, start researching for your solar installation project or purchase your solar power system kit, and track exactly how much you are spending on it. You must own, not rent, the dwelling unit in question. Then, when the time comes to file your taxes for the year, you will need to fill out IRS Form 5695 to claim the credit for a specific amount. If you use tax filing software, make sure you look for any questions about clean energy or investing in solar energy for the year.
Once you claim the tax credit, you can use it to automatically pay off your tax debt. If the credit exceeds the amount you must pay in taxes (not common, but it can happen), you can receive it as a refund, up to the amount of your tax liability for the year. If you can’t use all of the credit because of the tax liability limit, you can carry the unused portion of the credit to the following tax year.
Is Investing in Solar Worth It for Me?
Solar is a worthwhile investment for several reasons. The environmental benefits are clear – solar is a clean energy technology that can help reduce the carbon footprint. It also decreases reliance on external fuels, which can help save you money and make traveling in your RV a bit easier and more flexible while boondocking. Solar panels are also highly durable and easy to maintain (periodic cleaning and inspections are all that’s needed). Today’s panels are more efficient than ever and can include useful monitoring technology.
If you are interested in an RV solar installation, or solar power on your trailer, van, skoolie, Airstream, or other rig, contact AM Solar today for a custom quote! You can make an appointment to explore design options, learn more about expected savings, and see what the best solar panels for RVs can do for you.