Greenspace: Sun starts setting this year on solar tax credit
Technically, you have another 11 months to install solar energy to get a full 30 percent of the installation costs back on your taxes.
But if you’re looking to get in on that tax credit, you’d better start now, said Micah Johnson, operations manager of Solar Connection, a Rochester-based installer.
At the end of 2019, that 30 percent Residential Renewable Energy Tax Credit, which applies to solar energy projects, small wind installations, and ground source heat pumps, will decrease.
Homeowners have to own the systems instead of leasing them, and can apply the tax credit to the costs of the system.
The average solar installation costs between $10,000 and $40,000, Johnson said, which would mean a credit between $3,000 and $12,000.
However, that’s only if you can get a system installed by the end of the year. And even though it’s only January, spaces on Solar Connection’s calendar are filling up fast.
“I would start very early,” Johnson said. “The word is out — we’ve been getting called like crazy.”
Solar Connection isn’t fully booked for the year — yet — but it has as many jobs booked now for 2019 as it completed in all of 2018, Johnson said.
He imagines other solar providers are seeing a similar uptick. Anecdotally, some of his customers said installers in the Twin Cities have informed them they’d have to schedule up to 10 months out.
“We’re getting this huge bubble of interest right now,” he said. “At some point, probably mid-year, we’ll probably have to call it.”
To get the tax credit, systems must be installed by Dec. 31. After 2019, the tax credit won’t go away completely — it’ll scale down to 26 percent for systems installed during 2020, and 22 percent in 2021.
The tax credit will be gone in 2022, though. The similar Business Energy Investment Tax Credit will also phase out between 2019 and 2022.
Keep an eye out for Minnesota utilities’ openings for renewable energy incentives. Xcel Energy will begin taking applications for the 2019 season of Solar Rewards, a financial incentive program for customers with solar-energy systems 40kW or smaller, on Jan. 28. Minnesota Power began taking applications for SolarSense on Jan. 9, to reduce the upfront costs of solar energy installation.
Check with your energy provider to see it offers any rebates for installing a solar energy system.
Johnson reminded RPU customers that in order to get the rebates, they have to sign up for an energy audit and class. The next should be scheduled in late January or early February.