Author: Solar Bear

Here’s How to Claim the Solar Tax Credit on Form 5695

Exploring the world of solar energy brings its own set of rewards, not least of which is the Residential Clean Energy Credit, more commonly known as the Solar Tax Credit. This federal incentive not only sweetens the deal for homeowners making the switch to solar but also offers a tangible return on investment come tax season. But how do you claim the Solar Tax Credit for yourself? Here’s how you can claim every dollar you’re entitled to.

What is IRS Form 5695?

IRS Form 5695 serves as your golden ticket to claiming the Solar Tax Credit on your tax return. It’s the official document for reporting the installation of solar panels and other qualifying energy-efficient improvements to your home.

Think of the IRS Form 5695 as the bridge connecting your eco-friendly efforts to potential tax savings. The form delves into the specifics of “Residential Energy Credits,” allowing homeowners to calculate and claim non-refundable credit for eligible energy-efficient home renovations.

The Solar Tax Credit

The Solar Tax Credit can significantly reduce your federal tax liability. For the year 2024, the credit is calculated at 30% of the total cost of your solar energy system, including installation.

This dollar-for-dollar tax reduction typically provides a substantial decrease in the taxes you owe, possibly leading to a refund. To qualify, your solar energy system must be in service within the tax year in question, and yes, you need to complete IRS Form 5695 to stake your claim.

A Step-by-Step Guide to Claiming Your Solar Tax Credit

The journey to claim your Solar Tax Credit is a meticulous one, requiring a careful walkthrough of Form 5695:

Step 1 – Calculating Your Solar System’s Total Cost

Start by jotting down the gross total spent on your solar power system. Remember, this is before subtracting any state tax credits or rebates you’ve received.

Step 2 – Adding Other Energy-Efficient Improvements

Got more green upgrades? Add the costs of any additional energy-efficient improvements to lines 2 through 4. This could be anything from a solar water heater to a small wind turbine.

Step 3 – Working Out Your Tax Credit

Multiply the total from line 5 by 30% to find out the size of the tax credit pie you’re eligible for. This figure goes on line 6.

Step 4 – Entering Your Tax Credit Value

If you don’t have any carryover from fuel cells or previous years, place the value from line 6 on line 13.

Step 5 – Assessing Your Tax Liability

Now, figure out if you have sufficient tax liability from your taxable income to see if you’re eligible for the full 30% tax credit.

Step 6 – Finding Your Maximum Claim

Flip to page 4 and fill out the worksheet to see the maximum tax credit you can claim. This includes all the other credits you qualify for—anything from being a first-time homeowner to buying an electric vehicle.

Step 7 – Finalizing Your Claim Amount

Put the result of line 6 on line 14. Then, compare the values of lines 13 and 14. The smaller value is what you can claim this year. Put that value on line 15.

Step 8 – Calculating Carry-Over Credit

If your tax liability (from Step 5) is less than your tax credits, you can carry the difference over to the next year. You can calculate the amount for next year’s taxes by subtracting the value on line 15 from line 13, then entering the result on line 16.

Step 9 – Bringing It Home on Form 1040

The value on line 15 is what the IRS will deduct from your taxes this year. Make sure this number lands on line 5 of Schedule 3 on Form 1040.

Make the Switch to Solar With Confidence!

Have questions about solar energy or need guidance on making your home more energy-efficient? Solar Bear of Tampa is at your service. Our expertise isn’t just in harnessing the power of the sun—it extends to helping you understand the benefits that come with it, including the Solar Tax Credit. Call us today at (727) 471-7442 to learn more!

How Do I Know If My Solar Panels Are Underperforming?

If you’ve taken the leap into green energy by installing solar panels on your roof, congrats! But what if as time goes by, you start to notice subtle changes in your array’s energy production that leave you wondering if your solar panels are underperforming?

It’s a common concern that many homeowners have, but don’t worry, our team at Solar Bear Orlando is here to help!

Let’s discuss some key signs that can help you determine if your solar panels are underperforming, and what you can do to maximize their efficiency and longevity.

How Do I Know if My Panels Are Underperforming?

First, you must understand your solar array’s expected output. You should know the wattage of your system, though it is important to note that your panels will degrade slightly each year.

Also, you can check your electricity bill. If it is spiking, or you feel like you are consuming more electricity than usual, you should get your system checked out.

What Causes Underperforming Solar Panels?

There are a few reasons why your solar panels may be underperforming, including:

#1. Manufacturing Problems

If your solar panels are underperforming soon after their installation, it could be due to issues with the manufacturing of your specific panels. They could have gotten chipped or cracked in production, which could lead to output degradation.

Also, if they were not wired correctly internally, this could cause a decrease in their performance.

#2. Not Enough Sunlight & Shading

Though Florida gets ample sunshine, that doesn’t always mean that your solar panels will perform efficiently if they are shaded by trees, clouds, your garage, home, etc.

An experienced solar installer like ours at Solar Bear Orlando can help assess the shading on your roof, thus mitigating any efficiency issues caused by excessive shade.

#3. Extreme Weather Conditions

Florida is well-known for its extreme weather, be it in summer thunderstorms or hurricanes, and these, you guessed it, can lead to underperformance and damage.

Though solar panels are designed to withstand weather and temperature extremes, it is important to take measures to protect them when a storm is forecasted to ensure that they don’t sustain any damage.

#4. Defects

Just as damage during manufacturing can cause problems with energy output, so can solar panel defects that occur during production, shipment, or installation.

Watch out for:

• Delamination
• Induced degradation
• Snal trails or bird poop

Note: If you notice any kind of electrical issue, it is important to call a reputable solar contractor to fix or replace the panels, as they have the knowledge and experience to do so. Do not try to do any electrical work on your own, as this can be dangerous and can also void your warranty.

We also recommend seasonal maintenance to ensure your panels are producing energy as efficiently as possible.

Read More > Understanding Basic Solar Panel Specifications

Choose Solar Bear Orlando

When working with Solar Bear Orlando, you can rest assured that your solar array will work as efficiently as possible, and if it doesn’t, you know that we will make it right. We’re Central Florida’s #1 solar installation company for a reason!

Ready to go solar or need help with an underperforming system? Call our team at Solar Bear Orlando today at (727) 471-7442!

7 Tips For An Energy-Efficient Home In 2024

As energy prices skyrocket, homeowners everywhere are looking for ways to save money. While we can’t control the prices of electricity, we can offer energy efficiency tips to help you save a little money in your pocket each month. Any little bit helps, right?

Here’s the guide that our team at Solar Bear Orlando came up with. Try these seven tips!

• Install a solar array
• Insulate windows and doors
• Switch to LEDs
• Unplug unused devices
• Install a smart thermostat
• Seal air leaks
• Choose energy-efficient appliances

Let’s explore each of these a little further!

#1. Install a Solar Array

Our favorite tip on the list is of course to install solar panels. In Florida, our homes receive ample sunshine throughout the day, so why not use that energy to your advantage?

Solar panels convert sunlight into electricity through the use of photovoltaics. Of course, factors like your location, the orientation of the panels, and shade can greatly impact the efficiency of your panels, but they are an eco-friendly energy source that can help you save substantially on your home energy costs.

Plus, with net metering, you can sell your excess power back to the grid, allowing you to reap even more benefits! You can’t beat that!

Read More > Top Benefits of Solar for Florida Homeowners

#2. Insulate Windows and Doors

Let’s say you are powering or at least supplementing your home’s heating and cooling with solar energy. If you have drafty doors and windows, your home will be significantly energy inefficient!

We recommend applying weather stripping to your windows and using insulation and gaskets wherever possible on your doors.

Also, if your budget allows, we always recommend installing energy-efficient windows.

#3. Switch To LEDs

You’ve likely heard that traditional incandescent light bulbs are not very efficient, and it’s true. They can use a great deal of electricity, get hot, and burn out quickly. The good news is that LED bulbs last much longer than their incandescent counterparts, and use just a quarter of the energy as well. 

You may be saying, “But I like the warm glow from my traditional bulbs!” Well, don’t worry, you can get that same comforting hue with LEDs. Many are programmable and allow you to change the hue and intensity of the light in your home—all while saving on energy costs; nice!

#4. Unplug Unused Devices

Believe it or not, there are “energy vampires” that are sucking extra energy from around your house every day. Don’t believe us? Think about what you have plugged in day to day:

• Phone and computer chargers
• Coffee machines
• TVs
• Printers
• Small kitchen appliances

These small devices might seem innocent, but they draw electricity at all hours of the day and night and can increase your energy bill by 10%. Yikes!

We get that unplugging all of these devices can be a pain, especially if they are plugged in behind the couch, so we recommend using a power strip, which will allow you to switch off all the devices at once.

#5. Install a Smart Thermostat

We love the convenience of smart thermostats, plus they have amazing energy-saving potential. Modern smart thermostats are easily programmable and can adapt to your family’s routine.

Using a smart thermostat can cut your home’s energy usage by up to 15%! 

#6. Seal Air Leaks

Air leaks, whether from ductwork, recessed lighting, doors, windows, or outlets can become a big deal when you add them up. We recommend using caulk to seal any gaps, eliminating drafts, and helping you conserve energy throughout your space.

#7. Choose Energy-Efficient Appliances

Even if you install solar panels, if you have outdated appliances, the savings you will reap from your array will be diminished. Consider investing in “Energy Star” appliances if your budget allows.

These energy-efficient appliances have been tested to ensure that they consume less energy than their older counterparts.

Embrace Energy Efficiency

Ready to foster greater energy efficiency throughout your home? You’ve come to the right place! We can install a right-sized solar system that will produce clean energy while the Florida sun is shining, plus, we offer spray foam insulation services that will further enhance your home’s energy efficiency.

Ready to get started? Contact our team at Solar Bear Orlando for a quote today at (727) 471-7442!

Here’s How the 2024 Solar Tax Credit Works – Our Guide

The warmth of a sunny day has always been one of life’s simple pleasures, but now, it carries with it the promise of more—energy savings, reduced carbon emissions, and a step towards a sustainable future. As the world shifts towards renewable energy, the Federal Solar Tax Credit has become a standout incentive, turning the decision to switch to solar power not just environmentally sound but financially savvy, too. Here’s what you need to know about the 2024 solar tax credit.

The Basics of the 2024 Federal Solar Tax Credit

The Solar Investment Tax Credit (ITC) is a dollar-for-dollar reduction in the federal income taxes that you would otherwise pay to the government. For homeowners, this translates to a 30% credit on the total solar photovoltaic (PV) system cost, reducing the financial barrier to entry into solar energy. It’s a remarkable initiative by the federal government to encourage the use of clean, green energy.

Does the Date I Install My Solar Panels Affect My Credit?

Absolutely. Timing is key when it comes to reaping the benefits. For installations until 2032, you can claim up to 30% of your system cost as a credit. But, the credit decreases to 26% for systems installed in 2033 and further to 22% for 2034. Fast forward to 2035, and the credit is set to drop to zero, assuming there’s no renewal by Congress.

How to Claim the Federal Solar Tax Credit

Filing for the federal solar tax credit is a part of your annual tax return and involves several crucial steps:

• Start by downloading IRS Form 5695.
• Calculate the credit in Part I based on your system and installation costs.
• Be vigilant about any tax liability limitations on line 14 that may impact the final credit amount.
• Consult a tax professional or your solar provider to avoid any errors that could affect your credit.

Qualifying for the Solar Tax Credit

Wondering if you qualify for the solar tax credit? To determine eligibility, you must:

• Be a U.S. taxpayer who installed a solar system between Jan. 1, 2006, and Dec. 31, 2034.
• Make sure it’s the original installation and not a repurposed system.
• Keep the system within your primary or secondary U.S. residence.
• Own the solar PV system; leasing or power purchase agreements (PPAs) don’t qualify.

What Does the Federal Solar Tax Credit Cover?

The solar tax credit extends to a range of expenses related to your solar photovoltaic (PV) system:

• Solar panels or PV modules
• Additional equipment such as inverters, mounting gear, and wiring
• Solar energy storage devices like batteries
• Labor costs directly associated with the installation
• Sales tax on all eligible purchases

Can You Pair the Federal Tax Credit With a State Credit?

Yes! If your state provides its own solar tax credit, you can maximize your savings by claiming both. However, be prepared to pay federal taxes on the value of the state credit you receive.

Make the Decision to Go Solar Today!

Ready to harness free, clean, and renewable energy from the sun? The solar experts at Solar Bear of Tampa are ready to help you make a smooth transition to solar, providing you with a comprehensive understanding of all the benefits and incentives available. Our team of experts is ready to guide you through the installation process, optimize your claim for tax credits, and ensure you’re set to reap the rewards of your solar investment. Make the switch today—call us at (727) 471-7442!