The Top 3 Florida Solar Tax Credits for Homeowners

The Top Solar Tax Credits in Florida

Putting a solar panel system on the roof of your house could help you make your own electricity. That leads to savings on your electric bill. However, the initial cost of installing solar can sometimes be high. That is where solar tax credits can help. These tax credits reduce the cost of adding solar power to your home. 

Florida solar tax credits are plentiful. Here are some of the most important ways you can save money when you put solar panels on your home.

1. Federal Solar Tax Credit

All Florida residents who buy and install a qualified solar panel system in their homes can get the federal solar tax credit. The IRS Code covers this, 26 U.S.C. 25D, Residential Energy Efficient Property Tax Credit.

Using this tax credit, you can claim up to 30% of the cost of putting solar panels on your home. The tax credit reduces your federal income tax bill, or the amount of money you must pay to the federal government on tax day each year.

As noted by the US Department of Energy, this tax credit is a type of dollar-for-dollar savings. That means your tax bill will go down by up to 30% of the total cost of putting solar panels on your home, with no cap on how much you can save. However, you cannot get a refund for this tax credit. You can only lower your tax liability or eliminate it; you will not get a refund from these savings.

The amount you save is dependent on the year you invest in solar. From now through 2032, you can take a tax credit worth 30% of the total cost of the solar panel system. In 2032, that drops to 26%; in 2033, it drops to 22%; and it phases out in 2034 unless it is renewed.

These tax credits cover most of the costs of installing a solar panel system. The tax credit covers the panels' cost, the mounting equipment, the inverters, the solar energy storage, and the labor to put it all together.

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2. Florida Solar System Property Tax Exemption

Florida is one of the states that does not offer a solar tax credit for state income taxes. However, the Florida Solar System Property Tax Exemption can reduce some of these costs. If you install a solar panel system on your Florida home and that investment raises the value of your home, you do not have to pay added property taxes on that home.

For example, if your current home's value is $200,000 and you add a solar panel system, that could boost your home's value to $225,000 if you sell it. That boost in value could be considered for your property taxes in the coming years. However, with this exemption, you do not have to worry about that. You do not have to pay additional property taxes when you add a rooftop solar system like this to your home.

3. Home Solar System State Sales Tax Exemption

Another way to save money with solar tax credits is with the Home Solar System State Sales Tax Exemption. In this savings option, you do not have to pay state sales tax on installing solar panel systems on your home.

Usually, you must pay taxes to cover the state's costs when purchasing anything, even at a local store. Under Florida law, you do not have to pay sales tax on any solar panel energy system installed on your home or any components related to it that fall under the state's laws.

This savings, for the tax year 2023, is 6%. That is an additional 6% in savings on any other savings you may have.

Does Florida Have a State Tax Credit for Solar Panels?

Although some states have solar tax credits that allow you to reduce your state income tax, Florida does not. The Florida solar incentives are limited to the incentives mentioned here. While this can be disheartening, Florida's federal solar tax credits are a great way to lower the cost of solar panels for your home.

Is Net Metering Available in Florida?

Net metering is another way to cut down on some of the costs of installing solar panels in Florida. Net metering is a way to reduce the cost you pay for energy from your electricity provider. Here's how it works:

If your solar panel system generates excess energy or more energy than you need, it can be stored for when you need it or sent to the electric company in your area. If it is sent to the electric company, you receive credits worth the same as the retail rate of the electricity the company sells. The electric company can then use that electricity to power other people's homes.

Most Florida homes will still have a low electric bill each month. That may be due to periods when your solar panel system does not have enough energy, like at night or on cloudy days. In these situations, the credits from the electric company can help make up for these costs.

Are There Municipal Solar Tax Credits in Florida?

It is always wise to turn to your local government and electric company to find out if there are any additional savings options. Several big companies in Florida offer solar incentives at the local level, which can help you lower your financial obligations even more.

The Florida Keys Electric Cooperative Solar Loan Program is one example. Members approved for this program can get a loan of up to $35,000 to put solar panels on their Florida homes. This loan is very affordable and provides a 10-year repayment term. You can pay it off early.

The Boynton Beach Energy Edge Rebate Program may help those in this area save money. For those who invest in a solar panel system here, the Energy Edge program may be available. If you qualify, it will provide you with a rebate of up to $1,500 on your home's system. This applies to any energy-efficient improvement you make to your home.

There could be other Florida solar tax credits created in the future. Be sure to check in with your city, county, and local energy provider about any Florida solar incentives available.

How to Make the Most Out of Florida Solar Incentives

Florida solar panels are highly effective tools. Consider that the state has extended hours of sunlight each day and is likely to have great direct sunlight throughout the year. That means there is a free-to-access source of power to fuel your home. The key is that you have to tap into it.

The Florida solar incentives listed here are a great way to lower the amount of money you have to pay out of pocket to install solar panels. However, there are other ways to save, too.

Buy from the best provider

Not all of the solar panel companies in Florida charge the same thing for the same types of solar panels. If you spend a lot of money on your home's energy, you want to make sure it's the most cost-effective option. That means comparing several Florida solar panel providers, types of panels, and overall companies to find the most affordable option.

The correct number and type of panels

Always invest in high-quality solar panels. The most efficient solar panels will save you more money in the long term; these often pay for themselves over time. You also want to be sure you invest in the correct number of solar panels for your home. Most months, you won't have to pay your energy bills if you get the correct number.

Solar Panels Save You Money

At SmartSolar, we help you find the most affordable Florida solar panels available. You can use our no-obligation tools to find the lowest-cost solar panels for your home. We encourage you to get started now to take full advantage of solar tax credits. 

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