Federal Tax Credit for Solar in 2017 – What You Need to Know

There are a lot of changes to keep track of in 2017. New tax laws come into effect, old ones expire, and some things become more complicated.

One of the biggest changes is the introduction of the solar power credit in 2017. This credit allows property owners to claim tax deductions for the electricity they generate from solar panels on their roof.

The solar power credit comes with a lot of perks for those who claim it. To begin with, you’ll need to purchase a minimum of 10 kW of solar power equipment, which may incur a significant cost. Moreover, you’ll need to have the solar power equipment connected to the grid, which also incurs a significant cost. But beyond the hardware requirements, the credit provides tax breaks for homeowners who install solar power systems on their property. The installation of the system also needs to be done in a way that complies with the relevant Australian standards and regulations.

How Does the Solar Power Credit Work?

If you install a solar power system on your own property and connect it to the grid, you can claim the solar power credit. The credit is currently 20% of the cost of the solar power system in the first year, and then gradually reduces by 10% for each subsequent year. So in the third year, the credit reduces to 10% of the system cost.

Do I Need to File My Tax Return to Receive The Solar Power Credit?

You don’t necessarily need to file your tax return in order to claim the solar power credit. Instead, you can apply for the credit through a tax agent or on-line tax calculator. But if you apply for the credit through a tax agent, it is advisable to also file your tax return in order to make it simpler for the agent to verify your eligibility for the credit.

How Much Can I Claim As Tax Deduction?

Depending on your income and other sources of income, you may be able to claim a tax deduction for the cost of the solar power system. The amount you can claim is subject to multiple limitations and restrictions, so it is important to discover what these are before making a claim. But in general, if your income is over $80,000, you can claim the full cost of the system as a tax deduction. For income between $60,000 and $80,000, you can claim 80% of the system cost as a deduction.

When Does The Credit Begin To Applied?

The credit for solar is available for systems installed from 1 January 2017 onwards. But if you install a system before this date, you won’t be able to claim for it until your income tax return for the previous year is filed.

What About Replacement Energy Costs?

It’s also important to note that while the solar power credit applies to your electricity bill, it doesn’t cover the costs of replacing energy generated by the grid. So if you connect several solar power systems to the grid, you’ll need to factor this cost into your budget.

Who Pays For The Installation Of The Solar Power System?

For the installation of a solar power system on your own property, you’re responsible for the cost. But if you connect the system to the grid, the electricity you generate will be fed into the grid by the energy company. As a result, you won’t need to pay for the installation of the system.

If you decide to install a solar power system on your own property and connect it to the grid, make sure you speak to your local electricity supplier about signing up for a power plan that includes the installation and maintenance of the system. Doing this will save you a lot of money in the long run.

If you want to know more about the solar power credit, you can access the Federal website for more information. Here you’ll find all the information you need to know about how the system works and the forms you need to file in order to claim the credit.

Scroll to Top