For the uninitiated, the IRS aka Uncle Sam offers a tax credit to anyone who purchases a solar and or battery system connected to solar. There are many articles about it but trust none other than Energy.gov to give you everything you could ever want to know about the subject.
What we want to talk about today is how the tax credit, which is now 30% of the solar contract value, can affect your net worth.
Assumptions:
Solar Loan: $40,000
2022 tax credit (30%): $12,000
100-yr annual S&P 500 return: 10.49% (source: Investopedia)
Functional life of a solar system: 25 years
Monthly contribution: $0
Compounding period: annually
For the typical home owner there just isn't a better way to get a large chunk of your Federal Income Tax back. This is money that is already going to the IRS so getting that back and doing the smart thing with it by investing it could have a huge impact on your financials.
We're not financial advisors, and while the assumptions above are just that, it seems crazy to not put the solar tax credit to use with compound interest. Whether it's for retirement, a college fund or just a rainy day, we hope this helps shine a light on the benefits of going solar beyond utility bill savings.
If you'd like to explore how much Federal Solar Tax Credit you may receive, based on how much solar energy you need, we'd be happy to help.