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Tax Credits FAQ - Osceola Energy

Tax Credits FAQ

Q:When do the Solar Tax Credits Expire?



Federal solar tax credit extensions have been approved by the U.S House and Senate. The solar tax credit extension will gradually taper off with the following schedule:

  • 2017-2019: 30% solar tax credit
  • 2020: 26% solar tax credit
  • 2021: 22% solar tax credit
  • 2022 and beyond: 10% (non-residential and third-party-owned residential) or 0% (host-owned residential)

The bill also includes a "commence-construction" provision, allowing projects to come on-line by the end of 2023 and still qualify for larger credits.

Q:What it the difference between a Tax Credit and a Tax Deduction


A:A tax deduction reduces your taxable income by the amount of the deduction and a tax credit reduces your actual tax liability. For example, if your taxable income is $80,000 you can reduce your taxable income with a tax deduction. The Renewable Energy Tax Credit offered by the Federal government, is a tax credit, which allows for a greater benefit. If you have taxable income of $80,000 and are in the 25% tax bracket, you would owe $20,000 in taxes before the credit. If your credit is 30% of a $30,000 renewable energy system, you will be able to subtract your tax payment by $9,000. If you have already paid taxes in the amount of $20,000 over the course of the year, you will receive a credit in your tax return.


Who Qualifies for these Solar Tax Credits?


A:Homeowners who install a qualified renewable energy system and who owe federal taxes are able to receive the federal tax credit for the year their system is placed in service to produce energy. To receive the tax credit you must be the purchaser of the actual system equipment and will not qualify if you are leasing the system. If you do not have any tax liability or are not able to claim the complete amount of the credit against your tax liability, the credit will carry forward into the following year when you will be able to apply again. Credits may be carried forward through at least 2016. The credit will apply to qualified energy systems installed from 2009 through 2016 in both existing homes and new construction, as well as secondary residences, but does not apply to rental properties.


What Projects Qualify?


A:Qualified renewable energy systems receiving a 30% tax credit on installation and equipment costs are solar electricity producing systems, solar thermal/water heating systems, small wind-energy systems and geothermal heat pump systems. All equipment must meet basic certification standards to be eligible for tax credits. Osceola Energy only uses equipment that has received these certifications.