Claiming the federal tax credit for solar energy is a complex process. The easiest way to complete the process is to hire a tax professional to do your taxes and the necessary paperwork to file for the credit. This article is meant as an overview of what a tax professional will need to do to file for the federal tax credit for solar energy.
You should contact a qualified tax expert and consult with them. Neither Freedom Forever’s family of independent authorized dealers nor Freedom Forever itself can give you tax advice. A qualified tax professional will understand your situation and be able to give you the most relevant advice.
Preparing to claim the federal tax credit for solar energy
Your tax professional will need to file IRS Form 5695 as part of your tax return if you want the residential efficient property credit. They will calculate the credit on the form and then enter the result on your IRS Form 1040. Your accountant will likely be able to prepare and provide the form 5695 for you.
You will need to provide your tax professional with all of the information needed to complete your taxes. Additionally, you’ll want to provide information about your home and any energy efficiency improvements you made on it such as installing a solar system.
Home batteries are generally eligible for the federal tax credit
With all the recent public safety power outages in California, interest in home batteries has boomed. The good news is that you may also be eligible to claim the tax credit for batteries installed with your system.
In California and Nevada, there are state-level incentives for installing home batteries. These incentives are separate from the federal tax credit. California has the Self-Generation Incentive Program, which offers qualified applicants an incentive of up to $400 per kilowatt-hour of installed battery capacity. Similarly, the Nevada Residential Storage program offers an incentive of up to $3,000, not to exceed 50% of the installed cost of the system, to their qualified applicants.
The federal tax credit for renewable energy phases out in 2024
If you are considering improvements to your home that may be eligible for the federal tax credit for renewable energy, you need to act fast. The credit currently stands at 26%. It is scheduled to be reduced at the end of 2022 from 26% to 22%. After 2023, it will be phased out entirely for residential solar. If you are installing solar, you must have begun to install your system by December 31st. For batteries, the batteries must be installed by December 31st.
Freedom Forever is ready to help you go solar
If you are ready to go solar, Freedom Forever is ready to help. Our solar power systems are covered by our 25-year performance guarantee.
We guarantee that your solar power system will meet its promised production amount for 25 years.
Freedom Forever guarantees that the solar system will produce the electricity promised with our 25-Year Production Guarantee. We will even pay you for any shortfall from our fault. Home batteries are covered by their manufacturer’s warranty.
What we do if there is a problem. We monitor your system for 25 years. If we detect that its performance is falling short, we’ll contact you and send someone out to fix it. If the shortfall is caused by something that is our fault, we will compensate you for the shortfall. The amount of compensation you receive will be listed in your contract with us.