When the US Congress passed the recent tax reform bill, it effectively eliminated many incentives that companies and individuals have used to purchase solar products in the past. The good news for homeowners in South Carolina is that the state government still provides many financial benefits for solar energy systems, including a 30% tax credit and an installation fee waiver. This article will briefly walk you through how to take advantage of these popular programs.
The Federal Tax Credit
The federal tax credit is one of the most popular solar energy incentives offered by the US government. It allows homeowners and business owners to receive a tax deduction for the cost of their solar products. The credit equals 30% of the cost of the system, up to a maximum of $1500 for a single-family residence. The credit is subject to income limitations and cannot be claimed for any taxable year beginning after December 31, 2017.
While this credit has decreased in value over the years, it still provides owners with a valuable tax break. The reason is that the cost of a residential solar system continues to decrease, making the incentive more valuable. In order to take full advantage of this credit, you will need to install a solar system that produces at least 5kW of power. This should be more than enough to fully serve your residence. In some areas of the country, the cost of a 5kW system is less than $5000, which means that the tax credit alone will pay for the entire cost of the system. This credit literally can pay for itself.
The South Carolina State Tax Credit
South Carolina offers its own state tax credit to encourage homeowners to install solar energy systems on their roofs. This credit provides a 30% tax deduction for the cost of a qualified residential solar energy system. The credit is available to all residential homeowners in the state and can be claimed on a yearly basis. This credit is capped at $1500 for a single-family residence and cannot exceed the value of the federal credit.
The good thing about this state tax credit is that it is much easier to qualify for. All you need to do is own a residence in South Carolina and install a system that generates at least 5kW of power. The system must be installed by a licensed professional and must be inspected and approved by the state before you can claim the credit.
Installation Fee Waiver
The installation fee waiver is another popular provision in US tax law that offers homeowners and business owners a cash discount if they meet certain requirements. To be eligible for the full amount of this credit, you will need to be a homeowner or a business owner, and you will need to have financed 100% of the cost of your solar products including installation and inspections. You will also need to have purchased the product from a “qualified company” and cannot switch companies once the agreement has been fulfilled. This credit can be worth hundreds of dollars to those who qualify.
This credit is available for residential solar installations and can be claimed by contacting the company that you bought the system from directly after the sale. Just make sure to get the receipt and keep all the documents as you will need them later in order to claim the credit.
In addition to the tax credits described above, the federal government has offered a variety of valuable incentives for homeowners and business owners to install solar energy systems on their roofs. These incentives include the below items, but are not limited to them:
- Cash grants
- Rooftop Garden Program
- Energy efficient loan
- Loan Guarantee
- Zero cost loans
- Solar Power Plant
- Energy storage systems
- Sustainable Building
- Green jobs
These are just a few of the many ways that the federal government and the state governments in the US support renewable energy. If you are interested in installing a solar energy system, be sure to consult a real estate professional or the internet for more information on how to get the best financing.