Homeowner seeks first-hand advice on snagging solar panel incentives — the tips they received could save you thousands

If you're looking into rooftop solar panels, you've probably seen ads about tax credits bringing down the price. But how does this money-saving hack actually work?

A Redditor recently asked the r/solar community to explain how a $45,000 solar system (generally a price for rooftop panels on a large home) could drop to $34,000 through tax credits.

The scoop

The federal solar tax credit lets homeowners subtract a percentage of their solar installation costs directly from their tax bill. This is a dollar-for-dollar reduction in what you owe the IRS.

The Redditor posted, "Can anyone explain how tax credits work? When buying solar panels. Let's say I buy a solar panel for $45k and I get a tax credit of $11k. The sales rep says my net price will be $34k how is that possible I can use the tax credits as essentially a 'rebate'? Can anyone explain as easy and dumb it down for me."

How it's helping

This hack makes home solar much more affordable. The federal tax credit returns 30% of your solar installation costs, putting thousands back in your pocket.

However, this tax credit may not be available forever. President Trump has said he wants to eliminate these subsidies to reduce federal spending, so taking advantage of these incentives earlier rather than later could be worth thousands of dollars to homeowners considering solar. Major changes to these subsidies would ultimately require an act of Congress, making the future of solar incentives uncertain.

This tax break helps our planet, too. By making clean energy more accessible, more homeowners can switch from dirty power to clean sunshine. Going solar is one of the best ways to save money on home energy bills and lower planet-overheating pollution.

You can explore EnergySage's free tools to get quick solar installation estimates and compare quotes.

What everyone's saying

Reddit users stepped up with simple explanations. 

One wrote: "In 2022, the customer writes a check for $45,000 to the solar contractor. In exchange for that $45,000, the solar contractor buys the solar panels, buys the other hardware, pays for the labor to install the solar panels, and gets other stuff, like the necessary permits. 

"In April 2023, the customer files his or her federal taxes for the 2022 tax year. Within those federal tax filings, the customer tells the federal government that the customer paid $45,000 for solar during 2022 and then claims a tax credit equal to 30% of the $45,000 or $13,500. 

"The customer then, as part of the 2022 tax year federal tax filings, tells the federal government that he or she will pay $13,500 less in federal taxes for 2022."

Others noted that unused credits can roll forward: "I read that any unused portion of the credit can carry forward and be used in future years (possibly 1-2 years), but I'm not 100% on that."

Some users shared their own experience, with one saying, "You get this hilariously massive tax refund check."

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