Tax Deduction by using Solar Energy

Improving your home with a solar panel system is financially advantageous these days. The federal government, most states and even cities throw financial breaks at you to promote going solar. With the federal government, you are going to get a $2,000 tax credit, a figure that is subtracted from the amount of tax you owe the IRS at the end of the year. States pursue a variety of plans, but most offer rebates wherein they actually pay for part of your new system. Cities also offer rebates, often by discounting your property taxes.

On top of all of this, you can take advantage of net metering laws in a majority of states. Net metering simply means you can sell your solar electricity to the local utility when you aren’t using it. Known as being on the grid, nothing is more satisfying than watching your utility meter run BACKWARDS during the day! As you might imagine, this has a nice impact on your utility bill at the end of the month.

There is one additional financial trick many people fail to take advantage of when it comes to writing off solar panels and such – financing. Even if you have the cash in your hot little hand, you should consider taking a home equity loans or refinancing your home to pull out cash to pay for the system. Why? The mortgage interest deduction! Improvements to your home are deductible if they are incorporated into your mortgage payment.
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