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RCH Solar Information on Federal Tax Rebate

Are you considering installing a solar system on your home or business? Don't miss out on the Federal Solar Tax Credit, which offers a 26% tax credit on the total cost of your solar system. RCH Solar, your trusted solar company in New Mexico, can help you navigate the process of applying for and claiming this tax credit.

The Federal Solar Tax Credit, also known as the Investment Tax Credit (ITC), is available to homeowners and businesses who install a solar system before December 31, 2023. The tax credit covers 26% of the total cost of your solar system, including installation and equipment. This means that if your solar system costs $25,000, you can receive a tax credit of $6,500, reducing your net cost to $18,500.

At RCH Solar, we specialize in designing and installing high-quality solar systems that are eligible for the Federal Solar Tax Credit. We can help you determine the size and type of system that will meet your energy needs while maximizing your tax savings. We also handle all the paperwork and documentation required to claim the tax credit, making the process as smooth and hassle-free as possible.

In addition to the Federal Solar Tax Credit, there may be other state and local incentives available to you, such as the New Mexico Renewable Energy Production Tax Credit and the Solar Market Development Tax Credit. We stay up-to-date with these programs and can help you determine which incentives you qualify for and guide you through the application process.

Going solar is an investment in your future and the future of the planet. With RCH Solar, you can rest assured that you're getting the best possible deal on your solar system while reducing your carbon footprint and saving money on your energy bills. Contact us today to schedule your free consultation and learn more about how you can take advantage of the Federal Solar Tax Credit and other solar incentives in New Mexico.

What is the federal tax credit for solar energy?

The federal residential solar energy credit is a tax break that can be used to offset a portion of the taxpayer's investment in a solar PV system on federal income taxes. (Although they are outside the purview of this advice, other forms of renewable energy are also eligible for comparable credits.) The system must be fully installed by the end of the tax year.

Those that install solar PV systems in 2020 or 2021 are eligible for a 26% tax credit. Congress passed an extension of the IC in August 2022, bringing it to 30% for installations between 2022 and 2032. A 30% tax credit was also available for systems that were installed on or before December 31, 2019. For systems installed in 2033 and 2034, it will drop to 26% and 22%, respectively. If Congress doesn't extend the tax credit, it will end in 2035. The sum that can be claimed has no upper limit.

Do I qualify for the federal tax credit for solar energy?

If you fit the following description, you might be qualified for this tax credit:

- Installed between January 1, 2017, and December 31, 2034, is your solar PV system.

- The solar PV system is situated at one of your American homes.

- You either own the solar power system (i.e., you purchased it with cash or through financing, but you are neither

leasing the system nor paying a solar company to purchase the electricity generated by the system).

- Or, if the electricity produced is applied to, and does not exceed, your home's electricity consumption, you bought a stake in an off-site community solar project. Notes: According to a statement from the IRS (see link above), a specific taxpayer may claim a tax credit for investing in an off-site community solar project. However, other taxpayers may not rely on this document, often known as a private letter ruling (PLR), as precedent. Additionally, if all of your electricity comes from community solar projects, you would not be eligible.

-New or in use for the first time, the solar PV system. Only the "initial installation" of the solar equipment is eligible for the credit.

What costs are covered?

The following outlays are comprised:

PV cells or solar PV panels (including those used to power an attic fan, but not the fan itself)

Costs of contractor labor for site preparation, assembly, or first installation, as well as developer fees, inspection fees, and permit costs equipment for the balance of the system, including as wiring, inverters, and mounting devices.

Energy storage systems with a 3 kilowatt-hour (kWh) or higher capacity rating (for systems installed after December 31, 2022). The energy storage devices are nevertheless subject to the installation date requirements even if they are installed in a tax year that is later than the one in which the solar energy system was installed. Note: Other taxpayers may not rely on a private letter judgement as precedent.

Sales tax on allowable costs