Last week, I answered the phone to an upset customer. Upset because a solar representative from a competing solar installation company informed them that we were not offering all the benefits from the Solar Tax Incentive. They were upset because they were sure we were not helping them save all the money we should be. We sat down with the customer, walked them through the Solar Tax Incentive and the various solar quotes. However, all we discovered during that conversation was yet another solar scam: Promising customer money in the tax credit that are not legally available.
The 30% Solar Tax Incentive
The Solar Tax Credit (ITC) allows qualifying homeowners and business owners to deduct 30% of the cost of installing a solar energy system for your federal taxes. The ITC applies to both residential solar panel system and commercial systems with no cap on the value. The ITC was originally established in 2005 but has been set to extend through 2019 at the 30% rate. The 30% will be slowly reduced to 10% by 2022.
Previously, the solar panel installation had to be completely functional and connected to the grid before the tax credit could be applied. Now, updated legislation allows solar system owners to claim the tax as soon as the system is complete and operational by December 31, 2023.
The Federal HVAC Tax Credit
The Federal HVAC Tax Credit was made available for equipment purchased and installed in 2012-2017. In 2018, the U.S. government renewed the specific tax credit for high-efficiency heating and cooling equipment. The credit was made available as part of a larger energy-efficiency incentive for home improvement.
The Federal HVAC Tax Credit will now cover up to 10%, up to $500, or a specific amount from $50 to $300. The maximum credit for qualifying central Air Conditioners, Heat Pumps, Packaged Units and Ductless Mini-Split systems is $300. $150 maximum credit is available for qualifying Furnaces and Boilers.
Solar Scam: They’re everywhere!
There is a major difference between the Solar Tax Credit (ITC) and the Federal HVAC Tax Credit. They are both important credits that support energy efficiency. However, homeowners and business owners CANNOT claim 30% on a newly installed HVAC system. It is unethical for any contractor to promise a 30% tax credit, when at most, the consumer can claim a few hundred dollars.
We are seeing this more and more in the residential solar sales arena. Solar salesmen from competing companies are making promises to customers, in their contracts and quotes, they cannot comply with. Yet, these empty promises are winning them solar sales. This leaves customers feeling victimized. And quite frankly, it is a scam…and one that should be stopped.
Get Multiple Quotes, Ask Questions, Follow Your Gut
We believe that it is important for customers to speak to multiple local solar companies. Ask questions. And most importantly, if you think something is off – ask. Chances are good, that if you feel something is a scam, it probably is.