Florida Solar Tax Credits FAQ
Living in the Sunshine State, solar energy is a good way to offset utility costs, and if you are considering solar panels for your home, you’ll want to understand Florida’s solar tax credits.
There are several benefits to going solar, including tax savings! Our team at Solar Bear Orlando outlines everything you need to know about Florida’s tax credits.
Going Solar in Florida
Statewide, Florida averages about 237 sunny days each year. But that isn’t the only reason why it’s an optimal space for installing solar panels; additional incentives in Florida can minimize your initial investment. Now that’s a great perk!
Now, let’s talk about some of the best tax incentives for Florida residents who are going solar.
What Are Florida Solar Rebates and Tax Credits?
Currently, there are no statewide solar panel rebates in Florida. However, tax credits can still make the installation of solar systems in the Sunshine State more affordable.
- Sales Tax Exemption: Under Florida’s Solar and CHP Sales Tax Exemption, Floridians are exempt from paying the 6% sales tax on their solar panels.
- Net Metering: Net metering is allowed in the state of Florida and the Greater Orlando area, which means that utility customers who generate solar energy through their solar panel system can sell Renewable Energy Credits (RECs) back to the utility company. These credits can be used to pay for energy costs within the next 12 months.
It is important to note that these incentives may not last forever. In March 2022, Florida lawmakers passed a bill that would phase out net metering incentives by 2029, even though 84% of Florida residents support net metering.
What is the Solar System Sales Tax Exemption in Florida?
According to Florida statutes, all solar energy systems and components that are purchased and installed in Florida are exempt from sales tax.
This means that you will save 6% of what you would regularly pay.
What is Florida’s Property Tax Exemption?
Florida’s Property Tax Abatement for Renewable Energy Property incentive is set to run through 2037. With this incentive, Florida homeowners are 100% exempt from paying property taxes to improve their homes with solar panels.
What Federal Investment Tax Credits are Available?
Anyone around the country, not just Floridians, stands to benefit from the Federal Solar Investment Tax Credit or ITC, which was extended by Congress in August 2022.
The ITC covers the system, labor costs, energy storage devices, and more. Homeowners can enjoy a 30% credit for solar installation between 2022-2032.
The tax credit will decrease to:
- 26% for systems installed in 2033.
- 22%for systems installed in 2034.
The tax credit will expire starting in 2035 unless the United States renews it.
Am I Eligible for the Federal Solar Tax Credit?
You may be eligible for this tax credit if you meet these requirements:
- Your solar PV system was installed between January 1st, 2017, and December 31st, 2034.
- The solar system is located at a residence that you own in the United States.
- The solar system is new or being used for the first time.
- You own the solar PV system (you purchased it with cash or through financing, but you aren’t leasing the system)
- Or you purchased an interest in an off-site community solar project if the electricity is credited against it and doesn’t exceed your home’s electricity consumption.
Note: The credit can only be claimed on the original installation of the solar equipment.
How Many Years Can the Federal Solar Tax Credit Be Claimed?
You can only claim the Federal Solar Tax Credit for one year on every residential system installed. This means that you cannot get tax credits for two years or more for the same solar system.
But let’s say that you don’t owe any taxes this year but just installed a new solar energy system. You don’t have to claim the tax credit right away, you can apply it to your tax liability from the previous year or any time in the next 20 years. However, it is important to seek guidance from a licensed tax professional when seeking advice for redeeming the credit.
Florida Solar Installations
Florida’s ample sunshine is an affordable, reliable, and clean way of producing electricity that can reduce dependence on the electrical grid.
Moreover, the government provides several enticing tax credits and other incentives for those who choose to invest in solar energy. So, what are you waiting for?
Ready to harness the power of Florida’s ample sunshine? Call on our team at Solar Bear Orlando for a solar installation quote at (727) 471-7442!