2023 Solar Incentives Guide for Lakewood, CO - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Lakewood?

Source: https://www.dsireusa.org/

The term "solar incentives" refers broadly to financial incentives that are in place to encourage increased use of renewable energy by making installing and using solar panels more affordable. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are handled by the state of Colorado or by your utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions let you ignore the value that your solar panels add when you're calculating the amount of property tax you need to pay on your house.
• Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your Lakewood utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you might make back a percentage of the value.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
• Rebates: Rebates, or partial refunds after a purchase, are usually applied before any solar tax credits are calculated. Solar rebates might be provided by your local utility company, by your county or by your state.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a certain percentage of your solar system's cost.

The ITC can be applied to solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. This credit can apply towards a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.

Talking to your local Lakewood solar panel installer is the best way to learn more about how the ITC could apply to your situation.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. Homeowners can now receive a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. The credit will then be decreased by a few percentage points every year until the date of expiration. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. The easiest way to understand how the new Clean Energy Credit will apply to you is to speak with your local Lakewood solar panel installation expert directly.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more can be offered at a more local level. These solar incentives — which may be given by the state of Colorado, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Lakewood

The variety of available solar incentives has helped tremendously increase the adoption of solar energy nationwide over the last 15 years. You can get solar incentives from the federal government, the Colorado government or from your local utility company. Reaching out to your local Lakewood solar panel installation company is the best first step towards getting the most money possible when you switch to solar energy.