26% Tax Credit
What is the Federal Solar Tax Credit?
In December 2020, Congress approved an economic stimulus package designed in part to provide COVID-19 relief. That package included a two-year extension of the federal solar investment tax credit (ITC). The ITC for solar customers was originally scheduled to drop from 26% in 2020 to 22% in 2021 and then be phased out together in 2022.
But this recent stimulus package provided a big ray of sunshine to homeowners who plan to start using solar energy to reduce their carbon footprint. Lawmakers extended the deadline for the ITC, one of the most important policy drivers for solar power in every state in the U.S. The ITC enables owners of residential, commercial, and utility-scale solar projects to receive a tax credit on a percentage of the total installed cost of their solar system—making this clean energy approach much more economical.
What is Solar Net Metering and How Does it Work?
Many consumers who are thinking about going solar have heard the term "net metering" but aren't sure what it means.
Put simply, net metering is a utility billing mechanism available in most states that offers a credit to residential and business customers who are making excess electricity with their solar panel systems and sending it back to the grid.
When you have a rooftop solar system, it can often generate more electricity than you consume during daylight hours.
With net metering, the homeowner is only billed for the "net" energy used each month, that is, the difference between the energy produced by the solar power system and the energy consumed by the house over the monthly billing period.
When your house or business is net-metered, you'll see the meter run backwards, and that means, depending upon local policies, you may get a credit to hedge against the electricity you use from the grid when it's not sunny or at nighttime. You are then billed only for your "net" energy use. The excess energy generated gets put back to the grid for your neighbors to use.
Increase Your Home Value
One of the considerations people have when making an investment in solar is whether or not solar panels increase the value of your home. Many are concerned that it, in fact, could hurt the resale value of a home, even if it saves money on electricity bills. It is a little different than painting a bathroom or even installing a new sink - it's changing how energy is used. It is a home improvement project and one that you cannot DIY.
There is good news. In addition to saving money on your monthly electric bill, adding solar to your house can increase its value. According to a 2019 Zillow study, homes with solar sell for an average of 4.1% more than homes without solar.* For example, on a $500,000 home that could mean an additional $20,500 of value from solar alone, increasing the value of your home. In fact, more than 80% of homebuyers say energy-efficiency features (such as solar) are important to them. And when you take into account the possibility of added home value - plus any applicable incentives* — the solar investment can quickly pay for itself.
Avoid Rising Utility Rates
Avoiding this seasonal financial squeeze isn't always as simple as trying to use less electricity. U.S. residential electric rates are expected to be 2.4 percent higher this year than last year. So depending on where you live and how well you've learned to conserve electricity — with upgrades such as LED lightbulbs and energy-efficient appliances — this year you may still pay more to your utility company.
So how can you keep your home and budget comfortable in summer? A SunPower® home solar system is a solution that can enable you to generate your own clean, renewable energy to power your home during the heat of summer and all year long.