Florida Solar Tax Credits: Guide to Saving Thousands of Dollars

Florida Solar Tax Credits: Guide to Saving Thousands of Dollars

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Did you know that you could save thousands of dollars on your solar installation in Florida with solar tax credits? This system has been in place for several years to help promote the solar industry in the U.S. In this guide, we’ll explain how you can qualify for these Florida solar tax credits, so you can save potentially thousands of dollars! Even retroactively! Florida Power Services “The Solar Power Company” also welcomes you to contact us today for a free consultation. Disclaimer: This guide acts as a reference and introductory guide only, based on information available as of 2022. It should not replace professional tax advice or financial guidance. It does not act as financial investment or tax advice.

What Are Florida Solar Tax Credits?

  • Tax credits are a reduction in the amount of income tax you’re required to pay. So if you get $2,000 of Federal tax credits, your federal income tax is $2,000 less.
  • Florida is no different from the rest of the U.S. in that you have the opportunity to qualify for Federal Solar Tax Credits.
  • A percentage of your solar system costs can be claimed on your federal income taxes.
  • Federal solar tax credits have been present since 2006, and in 2022, the bill was recently renewed until the end of 2034.
  • There is no maximum amount that you can claim.

What Percentage Are the Solar Tax Credits?

You could qualify for a tax credit on the cost of your solar installation at the following rates:
Year Tax Credit Percentage Savings on $30,000 Installation (For Example)
Installed during 2022 30% $9,000
Installed from 2023-2033 30% $9,000
Installed during 2033 26% $7,800
Installed during 2034 22% $6,600
Installed after 2034 0% $0
Unless Congress renews the Federal solar tax credit system, then it will expire in 2034.

How to Qualify for Solar Tax Credits?

To qualify for the new 30% Florida solar tax credits (including retrospectively), you must meet the following criteria:
  • Your solar panel system must have been installed after 2021.
  • The solar power system must be used by someone paying U.S. income taxes.
  • Your solar panel system must be at your primary or secondary residence.
  • You must own the solar PV system.
  • The solar power system must be new, or be in service for the first time.
  • All electrical and fire code requirements must be met.

Commercial Property Requirements

If your business’ property has solar panels, you can also potentially for tax credits:
  • The solar power system must be used by someone paying U.S. income taxes (unless a school, charity, church or other tax-exempt organization).
  • The energy generated cannot be used to heat a pool.

How to Claim Solar Tax Credits

To claim solar tax credits in 2022, you should do the following when filing your tax return:
  • Ensure your installation starts before December 31, 2022.
  • Collect any receipt related to the cost of solar installations and solar power.
  • Fill out the IRS Form 5965.
  • Add the Tax Credits to Form 1040.
Instructions can be found from the IRS on the form here.

What Costs Do Florida Solar Tax Credits Apply to?

The amount you can reduce your federal income tax by is determined by a percentage of your solar panel system’s cost. Upfront costs and delayed costs can be:
  • Solar Power Installation Fees
  • Solar Equipment
  • Solar PV and Solar cells
  • Permitting Service Costs
  • Permit Fees
  • Shipping Costs
  • Engineer Fees
  • Electrician Fees
  • And More

Are Solar Batteries Eligible for Florida Solar Tax Credits?

  • Yes, batteries and other energy storage systems are eligible for federal solar tax credits – but they must be powered by solar panels.
  • Residential owners can receive a solar tax credit if 100% of the storage’s charge is provided by solar power.
  • Commercial owners can receive a tax credit if at least 75% of the storage’s charge is supplied by solar power.

Solar Tax Credit Frequently Asked Questions (FAQs)

Do Solar Tax Credits Apply to Re-Roofing?

The short answer iis no. Read our full guide on ‘Do Solar Tax Credits Apply to Re-Roofing’ here.

Can I Be Eligible as a Tenant?

Potentially yes. Tenant-stockholders at cooperative housing corporations or members of condominiums could qualify for solar tax credits if they helped pay for the solar system. You must be the owner of the system, however.

Can I Qualify for My U.S. Vacation Property?

Yes, so long as you are a U.S. taxpayer. It does not need to be your primary residence, it can be your second. If the system is installed on a property you rent out, then you will not qualify for the residential solar tax credit – but you may for the business tax credit.

What If My Property Isn’t Connected to the Grid?

You can qualify if your solar panel system and batteries are off-grid. It must generate electricity that is used at the property.

Do The Solar Panels Have to Be On The Roof?

No, so long as the panels are on your property or land and are generating electricity for the property, then you can qualify.

What if My Home Is Also My Work Place?

If your home is also your home office, then you can qualify for solar incentives but it can get complicated. If less than 80% of the solar PV system is a residential expense, then only the percentage of residential spending can be applied as a tax credit. The rest could qualify for commercial tax credits.

What Happens if I Paid for My Solar Installation Upfront?

If you self-financed the solar panel installation, you can claim the solar tax credits on the full cost. However, expenses such as interest owed on financing and extended warranties are not eligible.

I’ve Bought Solar Panels, But They’re Not Being Used Yet?

If you’ve purchased solar panels or other equipment but haven’t actually installed them yet, then these costs won’t qualify. The solar power system must be ‘in service’ during the year. That means they must be up and running, generating electricity for your home.

Can You Get Refunds on Tax Liability?

The Department of Energy states that this is a nonrefundable tax credit. You cannot get a tax refund on any amount of tax credit that exceeds your tax liability. But, you can qualify to carry unused tax credit amounts for the following year.

Can Tax Credits Be Used With Alternative Minimum Taxes?

Yes. Energy.gov states that tax credits can be used against the alternative minimum tax.

What Is the Solar Energy Rebate Grant Program for City of Dunedin Customers?

Here in Florida, there are other solar incentives, such as the City of Dunedin solar rebates. Approved for 2022, locals to The City of Dunedin can save money on their solar energy installations. The program allows locals to apply for a grant rate of $0.25 per watt of solar-generated, for a maximum grant of $2,500. Applications must be made by The City of Dunedin residents or businesses.

Cash-in on Florida Solar Tax Credits Now

As one of Florida’s leading solar companies, we’d love to help you take advantage of these fantastic saving opportunities in 2022. In recent years we’ve helped hundreds of Florida residents and commercial property owners take advantage of federal tax credits on time. Schedule a consultation with Florida Power Services “The Solar Power Company” today, and we’ll answer any questions you may have and can install a solar system that ensures your property is built for the future!
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