The Republican tax bill passed in the waning days of 2017 may have dealt a blow to some, but don’t count the solar energy industry among them. While earlier versions of the bill threatened to eliminate favorable solar energy tax credit policies for the industry, the final bill contained no such provision, all but ensuring a path toward accelerating growth and falling prices. This is good news for homeowners, who can continue to claim a 30 percent federal investment tax credit on the purchase and installation of rooftop solar energy systems, while also benefiting from a continued drop in solar roof pricing.
Homeowners not familiar with the solar tax credit, commonly referred to as the Federal Investment Tax Credit (ITC), should learn more about the solar ITC if they are considering installing photovoltaic roofing products, such as solar shingles, solar tiles, or solar panels.
How Does the Solar Investment Tax Credit Work?
The solar investment tax credit is a dollar-for-dollar reduction in the amount of income taxes that an individual must pay to Uncle Sam. In this case, the homeowner can subtract 30 percent of the total spent on solar products, installation costs and permitting fees from the amount due in federal taxes. Additional costs, such as reroofing or electrical work related to the solar project, may also be deductible in certain cases.
According to the Solar Energy Industries Association, the national trade association of the U.S. solar energy industry, “The recent ITC extension is expected to nearly quadruple solar deployment by the end of 2020.” But what does this mean for the average homeowner?
Questions to Ask if You’re Considering Installing a Solar Roof
In case the federal tax credit and the notion of “being green” haven’t quite convinced you that solar energy is for you, here are some other considerations that can help you decide:
- How long will you be living in your house?
- What kind of sun exposure does your house have?
- What incentives are available where you live?
- What other costs may be required?
- Do you like the look of solar panels?
Let’s explore these questions in more detail.
1) HOW LONG WILL YOU BE LIVING IN YOUR HOUSE?
The lifespan of a solar roof installation can be 25 to 30 years or more. Most experts will agree that you should plan to be in your house for at least several years to make your solar investment pay off.
2) WHAT KIND OF SUN EXPOSURE DOES YOUR HOUSE HAVE?
If you have a southern exposure with lots of natural sunlight, you will benefit more than someone with a northern-facing home. Some homeowners can even sell surplus energy back to their utilities for credit through a process called net metering.
3) WHAT INCENTIVES ARE AVAILABLE WHERE YOU LIVE?
In addition to the solar ITC, some states offer additional incentives that help finance or reduce the cost of your solar installation. DSIRE, a project funded by the U.S. Department of Energy, tracks incentives and policies that support renewables and energy efficiency throughout the United States.
4) WHAT OTHER COSTS MAY BE REQUIRED?
Generally, solar installations don’t require much maintenance, however, some homeowners may need to upgrade or replace their roof prior to installation. CertainTeed is unique in that we offer roofing products and installation resources in addition to solar roofing products.
5) DO YOU LIKE THE LOOK OF SOLAR PANELS?
While some homeowners swear by the modern, high-tech look that solar panels can provide, others don’t feel the same. (Some prefer the look of solar shingles or tiles to traditional PV panels.) While the looks may not be for everyone, the benefits are clear. Data varies by region, but according to a study by Lawrence Berkeley National Laboratory, consumers are willing to pay an extra $15,000 for a home with rooftop panels.
Still unsure? A great first step is to visit the Google’s Project Sunroof and find out the solar potential for your home. A nifty little algorithm calculates how much usable sunlight is available for your home and whether your home is a good solar candidate. You can also explore CertainTeed’s solar roofing resources to learn more about our solar products and services and find contractors in your area.