The federal residential solar energy credit is a tax credit that can be claimed on federal income taxes for a percentage of the cost of a solar PV system paid for by the taxpayer. (Other types of renewable energy are also eligible for similar credits but are beyond the scope of this guidance.)

The installation of the system must be complete during the tax year.

Solar PV systems installed in 2020 and 2021 are eligible for a 26% tax credit. In August 2022, Congress passed an extension of the ITC, raising it to 30% for the installation of which was between 2022-2032. (Systems installed on or before December 31, 2019 were also eligible for a 30% tax credit.) It will decrease to 26% for systems installed in 2033 and to 22% for systems installed in 2034. The tax credit expires starting in 2035 unless Congress renews it.

There is no maximum amount that can be claimed.

(Information provided by Energy.gov)

A tax credit is a dollar-for-dollar reduction in the amount of income tax you would otherwise owe. For example, claiming a $1,000 federal tax credit reduces your federal income taxes due by $1,000. The federal tax credit is sometimes referred to as an Investment Tax Credit, or ITC, though is different from the ITC offered to businesses that own solar systems. (Information provided by Energy.gov)

Net metering allows solar owners to earn credits for excess energy that they send to the grid that offsets their grid usage when their panels aren’t generating power.

Florida’s current net metering rules were enacted in 2008 by the Florida Public Service Commission (PSC). These rules provide a fairly good version of net metering, but there are some important things to know.

First, the state’s net metering law only applies to Investor Owned Utilities (IOUs). Customers of these four companies are covered:

Florida Power & Light (FPL)

Duke Energy Florida

Tampa Electric Company (TECO)

Florida Public Utilities Corporation

(Information provided by Solarreviews.com)

Florida introduced a sales tax exemption for solar energy and combined heat and power (CHP) systems in July 1997. The incentive was originally slated to only last five years, but the state converted the sales tax exemption into a permanent benefit. The sales tax exemption applies to the following:

The retail rate of solar panels, solar heaters and combined heat and power systems

It is available for residential, commercial and agricultural uses

Floridians don’t pay sales tax when purchasing a solar energy system, regardless of the size of your system. However, you must use solar equipment certified by the Florida Solar Energy Center to qualify for the exemption. The solar sales tax exemption does not involve a complex process — you are simply not charged the 6% sales tax when purchasing an eligible solar panel system in Florida.

(Information provided by marketwatch.com)

This exemption is available to individuals and companies.

Eligible systems must convert sunlight into energy for use as a power source for another system.

Applies to equipment and any component currently certified by Florida Solar Energy Center as a qualifying solar energy component: solar collectors, pumps and controls, photovoltaic power conditioning equipment, energy storage units, and accessories integral to a qualifying system.

Exemption is available by certifying to the seller that the items purchased or leased qualify for the exemption.

References: Section 212.08(7)(hh), F.S., and Tax Information Publication #05A01-05

(Information provided by floridarevenue.com)

Home improvements can increase the assessed value of your property, which normally means you have to pay higher property taxes. However, Florida has the Property Tax Abatement for Renewable Energy Property, so you are not taxed for any increase in home value after installing solar panels. This exemption works as follows:

Your property taxes remain unchanged if your home becomes more valuable due to a solar panel installation.

This incentive was introduced in July 2013 and will remain available through December 2037.

(Information provided by marketwatch.com)