Solar Tax Credit
This question is extremely important when considering solar, not only because it will cut your total cost for the project but also because it may be a bit confusing in terms of whether or not you can benefit from this tax credit and how you can benefit from this tax credit.
What is a tax credit? To put it in one sentence, a tax credit is the ability to reduce your tax liability dollar for dollar. Here are a couple of examples:
Let's say at the end of the year you owe the IRS $6,000, and you have a tax credit of $6,000 - well you're in luck - you now owe the IRS $0.
Now let's say you got $6,000 in federal income taxes taken out of your paychecks for a year, and you have a tax credit of $6,000 - the IRS will then send you a check for $6,000. To put it simply - a tax credit is a huge benefit for anyone looking to purchase solar panels.
And now that you understand what a tax credit is, it will be easier to understand what a solar tax credit means. It is simple. In Folsom, Ca the solar tax credit is equal to 30% of the cost of the solar system purchased. So, if you purchase a $20k system, you will receive a $6,000 tax credit, and your net cost for the system would be $14k.
This is the biggest incentive to purchase solar in Folsom, Ca and the ability to cut your cost by 30% means that your payoff goes down dramatically.