Best Ways in 2023 to Pay for Residential Solar
Every year, the cost of going solar drops. And as the technology becomes more accessible for more homeowners, solar installers can expect their installation queues to grow longer, especially now that the federal solar tax credit has been extended through 2034 with the passing of the Inflation Reduction Act.
Thanks to this latest extension, homeowners who choose to have solar installed on their homes in 2023 will be eligible for a 30% tax credit. This will no doubt make it a major topic of discussion when pitching solar to your prospects this year.
In this post, you’ll learn everything you need to know to advise your solar prospects about the federal tax credit and how it can help them save money when financing their residential solar installations.
What is the Federal Solar Tax Credit for 2023?
The federal solar tax credit is also known as the Investment Tax Credit (ITC). It provides those who install a PV system between 2022 and 2032 with a 30% dollar-for-dollar tax credit. The ITC will decrease to 26% for systems installed in 2033 and to 22% for systems installed in 2034.
The updated federal solar tax credit also includes solar+storage equipment expenses, as long as the energy storage devices have a capacity rating of 3 kilowatt hours or greater. This includes stand-alone storage.
For the average-sized rooftop solar installation, the 30% tax credit would provide a homeowner with a savings of more than $7,500.
2023 Solar Tax Credit Eligibility Requirements
A homeowner needs to meet the eligibility requirements to receive the Investment Tax Credit. These requirements include:
- The solar system needs to be an original, new installation completed in 2023 or is made operational for the first time in 2023
- The homeowner must own the system outright or have financed the parts and installation with a loan
- The solar system cannot be leased
- The homeowner must not be paying anyone for the energy created by the system
How to Claim the 2023 Investment Tax Credit
To claim the Investment Tax Credit for their solar installation, the homeowner will need to complete and include IRS Form 5695 with their 2023 federal tax return.
Solar Financing Options in 2023
Despite solar’s substantial price drops, installation costs can still range in the tens of thousands. And to qualify for the ITC, a homeowner needs to purchase their system, not lease it. This means that they will either have to pay cash for their system or finance it.
Luckily, homeowners have a wide range of financing options to choose from that can help them fit their solar installation within their budgets. Some of the best options for financing solar in 2023 include:
Solar Loans: These types of loans are for offered by lenders for the sole purpose of financing solar installations. Solar loans are favorable because they allow the homeowner to have their solar panels installed and to start using the power they provide right away with little to no money down. Solar loans work just like any other type of loan, with a payment plan requiring the borrower to pay monthly payments over a period with interest added. By using a solar loan, the homeowner can take advantage of the ITC and any other available incentives as if they paid for them outright.
Cash-Out Refinance: If the homeowner is in the market to refinance their mortgage, and they have enough equity in their home, then a cash-out refinance can be an attractive option that will help them accomplish two goals. With this solution, the homeowner can refinance their mortgage at a lower rate and get the cash they need to pay for their solar system in full.
Home Equity Line of Credit (HELOC): If the homeowner has plenty of equity in their home, but they don’t want to refinance, then they can tap into their home equity using a home equity line of credit to pay for their solar system. A HELOC works like a lower-interest credit card so once the solar installation is paid off, the homeowner will be able to tap into their HELOC again and again to complete other home improvement projects.
Get Exclusive Access to High-Quality Solar Leads and Prepare for a Successful 2023
If you want to ensure a successful 2023, then you need to be nurturing your solar leads right now. Spring will be here before you know it and you want to ensure that your installation calendar is full. RGR Marketing can help you start the year off on the right foot with our high-quality solar leads.
Why Should You Purchase Solar Leads from RGR Marketing?
At RGR Marketing, our leads put provide you with the contact information for prospects who have shown recent increased interest in solar. These are homeowners who have already done a lot of their own research and are on the cusp of making their purchasing decision. In addition, we also verify all our solar leads for accuracy and scrub them to remove any duplicates, incomplete profiles, or invalid data, thus saving your sales and marketing teams valuable time and resources.
RGR Marketing has 20-plus years of experience serving the solar industry. We understand your industry and know what makes for a quality lead. Purchase a list of targeted solar leads from us and discover for yourself how our commitment to your success can help your solar installation business grow in 2023 and beyond.
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