How to Increase Your Solar Tax Incentives in Florida!

Understand and Leverage Federal and State Tax Credits Available to Florida Residents

Florida, our sun-soaked paradise, is ripe for solar energy, and there are plenty of tax incentives to make it even sweeter. At Horizon Energy Solutions, we're all about helping homeowners navigate these opportunities to ensure you get the most bang for your buck.

What Are Solar Tax Credits, Anyway?

Think of a solar tax credit as a discount coupon from the government, allowing you to deduct a portion of your solar system's cost from your income taxes. Whether it's through:

- Federal Solar Tax Credit: Open to all U.S. taxpayers installing a solar system.

- State Solar Incentives: Exclusive perks for us Floridians with solar setups.

Remember, these are nonrefundable credits, meaning they can reduce your tax bill to zero but not below. What happens when you have more credits than tax? Rolls right over to next year!

The Federal Solar Tax Credit (ITC)

This generous incentive lets you deduct a percentage of your solar system's cost from your federal taxes. Initially set to taper off, the Inflation Reduction Act of 2022 has now boosted the ITC back to a robust 30% for installations done between 2022 and 2032. And yes, this even includes energy storage devices like batteries.

Who Qualifies for Federal Solar Tax Credits?

- You need to own your system (cash or loan).

- Install your system between January 1, 2006, and December 31, 2032.

- Have sufficient tax liability to apply the credit.

To claim, fill out Form 5695 with your tax return and keep your purchase documents handy. More details are available on the IRS website (link below).

Understanding Tax Liability

Your tax liability is what you owe the government after all deductions and credits. Calculating it involves knowing your taxable income and tax rate, which depends on your filing status and income sources. The federal solar tax credit can then reduce this liability, dollar for dollar.

Ensuring Enough Tax Liability

To fully benefit from the ITC, you'll want to ensure your tax liability over the coming years can absorb the full credit. Planning and consulting a tax professional can help you navigate this, considering your income, filing status, and other deductions or credits you might be eligible for.

Florida Solar Incentives

Besides the ITC, Florida offers additional incentives, making solar even more appealing:

Property Tax Exemption

Installing solar won't hike up your property taxes in Florida, thanks to a voter-approved exemption. This means the added value from your solar system won't be taxed, potentially saving you a significant amount annually.

Sales Tax Exemption

When you buy solar panels in Florida, you're also exempt from the state's 6% sales tax, plus any local sales taxes. This immediate saving reduces the overall cost of going solar.

Net Metering in Florida

This policy lets you earn credits for excess energy your system sends back to the grid, offsetting your electricity bill. Florida mandates net metering for systems up to 2 MW, allowing indefinite credit carryover.

Other Incentives

Local and utility-specific incentives can further sweeten the deal, including rebates, grants, and special financing programs. Tools like the DSIRE database can help you find what's available in your area.

Combining federal and state incentives can significantly lower the cost and payback period of your solar investment. If you're thinking of making the switch, comparing quotes from reputable installers is a smart move. Horizon Energy Solutions offers a solar savings calculator to help you start your journey, providing personalized savings estimates and information on solar energy.

Interested in seeing how much green you can save on your home? Try our free solar savings calculator by clicking the button below!

Sources:

Guide to Federal Tax Credit for Residential Solar PV

Federal Solar Tax Credit Resources

All solar panel incentives & tax credits in 2023 by state

Florida Solar Incentives: Tax Credits & Rebates 2023

Solar Incentives: Tax Credits & Rebates (2023 Guide)