Are Solar Batteries Eligible for Tax Credit?
Are you considering switching to solar power in Florida? You may be interested in knowing if solar batteries qualify for tax credits.
This article will provide an overview of what you need to know about solar battery tax credits and how they can help make the switch to solar even more affordable. We’ll explore eligibility, potential savings, and other factors that can affect the cost of switching to solar-powered energy. Let’s dive in!
The Inflation Reduction Act of 2022
Before we get to the question of tax credits and solar batteries, we first must discuss the Inflation Reduction Act (IRA) that was signed into law in late 2022 by President Biden.
Regarding solar panels and solar battery storage, this credit was formerly known as the Investment Tax Credit, but it was recently expanded by the IRA. It is worth a 30% credit on your total solar installation costs and is available until 2032. After that, the credit will reduce to 26% in 2033 and 22% in 2034.
Solar Batteries and Tax Credits
So yes, to answer the questions, in many cases, homeowners can receive a tax credit for installing solar batteries.
In Florida, homeowners can receive a federal tax credit of up to 30% of the cost of installing a solar battery system. This means that if you invest $10,000 into a new solar battery system for your home, you may qualify for a $3,000 credit on your taxes. Some states also offer incentives and rebates on top of this federal tax credit.
It’s important to note that specific requirements must be met to qualify for these tax credits. For example, solar batteries must be charged entirely by renewable energy sources such as wind or solar power. You must also own the battery system (not leasing it) and own the property you are installing it on.
Finally, the battery must have a capacity of no less than 3 kilowatt-hours.
Do Standalone Solar Batteries Qualify?
Batteries that aren’t directly connected to solar panels also qualify for the tax credit as of 2023.
What if I Already Have Solar and I Want to Install a New Battery?
Although there has yet to be guidance issued about this specific scenario, it appears that homeowners will be able to claim the energy credit for adding battery storage to their existing solar systems.
For example, if you installed a solar system in 2022 and claimed the tax credit for it, you could add a solar battery storage system and claim that in 2023 for a tax credit too.
How Can I Apply for the Tax Credit?
The good news is that you don’t have to apply for the solar battery tax credit, you just need to claim the credit when you file your taxes.
Things you will need to claim the credit include:
- All receipts associated with the solar battery installation
- IRS Form 5695 for residential taxpayers or IRS Form 3468 for commercial taxpayers
- Add your credit information to your IRS form 1040
Remember, even though the solar tax credits are available for the next ten years, it doesn’t mean that you should wait to invest in solar! The sooner you install a system, the sooner you’ll see savings on your energy costs and taxes!
This is Great, But Do I Even Need a Solar Battery?
Honestly, whether you purchase a solar battery depends largely on your situation and power needs. But we truly believe that a solar battery storage system adds a lot of value to your solar system.
The biggest benefit is that having a bank of stored power can be greatly helpful during a blackout or major weather event like a hurricane.
Plus, you’ll be able to become even more energy independent as pairing a solar battery with your solar system essentially creates your own mini utility ready to use whenever you need power.
Central Florida Solar
Those tax rebates are sure enticing, aren’t they?! And those savings don’t even include the reduction in energy costs and dependence on your utility company!
Take advantage of Florida’s sunshine and install a solar system and solar battery at your Central Florida home or business today! Contact our friendly solar pros at Solar Bear Orlando for a quote today at (727) 471-7442!