Table of Contents
Do Solar Batteries Qualify for Tax Credits?
Many homeowners throughout the United States have benefited from the expanded Investment Tax Credit (ITC) for solar panel installation, making it more affordable for them to switch to solar energy. However, there has been confusion among many regarding whether solar batteries are eligible for the tax credit as well. The answer is yes, solar batteries are eligible for the solar tax credit in Connecticut and other states, as of January 1, 2023.
What Is the Inflation Reduction Act Solar Battery Tax Credit?
The tax credit for solar battery storage is the same as the tax credit for home and commercial solar panel installation, formally known as the Investment Tax Credit. Recently, the Inflation Reduction Act expanded this tax credit, making it worth 30% of your total installation costs until 2032. After that, the tax credit will be reduced to 26% in 2033 and 22% in 2034. From 2035 on, solar batteries will be eligible for a 10% credit.
How Much Can You Save with the Inflation Reduction Act Battery Storage Tax Credit?
It’s important to note that the solar tax credit is a tax credit, not a rebate. You won’t receive a direct payment, but you will receive a credit on your federal taxes, reducing the amount you owe. The credit is worth 30% of your total installation costs. So, if you spend $10,000 on your installation, your tax credit will be worth $3,000.
How to Get the Solar Tax Credit for Solar Batteries
To qualify for the credit, you must:
- Own your battery system
- Own the property your system is installed at
- Have taxable income
To claim the credit, you don’t need to apply for it; you just need to claim it on your federal taxes. Make sure you keep all receipts associated with your installation, obtain and complete IRS Form 5695 (for commercial taxpayers, IRS Form 3468), and add your credit information to your typical IRS Form 1040. It’s recommended to consult with a tax professional before making any decisions.
Learn More About Battery Storage Installation Near You
If you’re interested in getting a solar panel and battery storage installation for your home, Solar Energy of CT can help. As Connecticut’s premier solar photovoltaic designer and installer with over 35 years of combined experience, our team is ready to provide you with professional solar panel and battery installation services. Contact us today to learn more about solar battery incentives in Connecticut and other states, and to take the first step towards a more sustainable future.