Are There Tax Advantages to Solar Power?

May 24, 2023

According to Energy.gov, over 3% of all electricity in the United States is derived from solar power via solar photovoltaics (PV) and concentrating solar-thermal power (CSP). Americans know that solar power benefits the planet and can lower utility bills, but are there tax advantages to solar power? In this article, we'll go over everything you need to know about solar power and its tax advantages.


Federal Solar Tax Credit

This tax credit is one of the biggest tax advantages to solar power. The year you install your solar power, you will qualify for a federal tax credit in the United States. This won't automatically give you a refund for the money you spend on your solar panels. However, it will lower your tax bill, making you pay less taxes. This credit is only applicable the year that you install solar power, and the solar equipment must give electricity to a house in the United States.


State Solar Tax Credits

Many states offer a similar tax credit to homeowners who install a solar system or solar products, such as a solar water heater. However, this number and the percentage of the system that you receive a tax credit for varies depending on the state that you live in. It's important to discuss the tax advantages of solar with an accountant or research the tax laws in your state to determine how much of a credit you'll receive.


Other Solar Incentives

As the government continues to push for more solar power, many states offer incentives to homeowners who install a solar system. Many states offer rebates and renewable energy certificates as further incentives to install solar power. Some states will not include the installation of solar power in the value of your house, ensuring that your property tax does not go up. States may offer solar systems tax-free, meaning you don't have to pay sales tax to reduce the cost.


Solar power offers many benefits, and it also has tax advantages. If you're willing to make the initial investment, you can see great benefits in the long run. When you're ready to leap into solar power, call Northwind Solar today! We are more than happy to answer any questions you have about the tax advantages to solar power.

July 14, 2025
I went solar with Northwind, and it was a great experience! Since friends don’t let friends miss out on solar, I wanted to refer you to Northwind so you can see if it might be a good fit for you too, especially with this being the final year to claim the 30% residential solar tax credit . Just fill out the form below, and Northwind will be in touch to explore your options and provide a free, no-obligation solar estimate.  Be sure to include my name so they know I sent you!
June 20, 2025
Right now, the federal Investment Tax Credit (ITC) offers a 30% tax credit to businesses that install solar energy systems. Originally scheduled to continue through 2033, the current Senate version of the bill maintains this 30% rate only through the end of 2025. After that, the credit is set to step down sharply: 18% in 2026, 6% in 2027, and 0% in 2028 and beyond. Don’t Miss the Safe Harbor Window Fortunately, there’s a way to lock in the full 30% credit before it’s reduced. Under the IRS’s "safe harbor" provision, you can preserve the full ITC by beginning physical work on your project or making a minimum 5% down payment by the end of 2025 — even if your system is completed in 2026. This is a powerful opportunity to secure long-term financial benefits while the full federal incentive is still available. Stackable Incentives Make the Financials Even Better Beyond the ITC, there are several additional programs that can dramatically reduce your project’s net cost: 10% Domestic Content Bonus: Earn an extra 10% tax credit for using U.S.-made solar components. Focus on Energy Rebates: A Wisconsin-based program offering upfront cash rebates for solar projects. MACRS Accelerated Depreciation: A federal tax benefit that allows you to recover the cost of your solar system more quickly through tax deductions. Solar Central Wisconsin Grow Solar Group Buy: Group pricing and additional resources that make going solar more affordable for local businesses. When stacked together, these incentives can cover a significant portion of your total investment, all while reducing your energy bills for decades to come. Why Act Now Solar has always been a smart investment, but today’s environment is uniquely favorable. With utility energy costs rising and key federal credits sunsetting, 2025 is the year to take action. Whether you’ve previously explored solar or are just getting started, revisiting your project now could mean locking in tens of thousands of dollars in savings. Northwind Solar can help you navigate every step, from incentive qualification to project design and installation. Improve your profitability by making a high-performing energy investment in your business. Achieve energy independence, support local businesses, and contact Northwind Solar today! REQUEST A FREE ESTIMATE Reach out anytime at: 715‑630‑6451 ___________________ Additional Resources: Update on Residential Solar Incentive Changes Solar Incentives Overview Grow Solar Central Wisconsin Group Buy Program
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