The word ‘solar energy’ has garnered a tremendous amount of hype in the past few years.
Naturally, almost every person is probably already familiar with the fact that we can now harness electricity directly from the sunlight and save a ton of money on electricity bills.
The Internet is full of articles reflecting the possible benefits of solar energy and what is the best way to power your home in the near future.
Top 10 benefits of switching to solar power. Image source: greenenergyjubilation.com
And if you have taken into consideration all the benefits of solar energy, you may already decide to install a solar system such as a solar water heater on your roof.
While the solar system by itself is a great investment, now you may ask yourself how can you add further value to it and save even more.
Luckily today we have another great benefit for you to save even more, that you’ve probably missed.
And the HUGE added value to your solar water heating system for BIG savings is installing a solar air conditioner.
How Much Money Will Solar Air Conditioner Actually Save You?
While the simple answer is that you will definitely save a lot, the specific amount of savings can vary from situation to situation. That answer is not always so simple, and it requires a number of factors to consider.
The variables that should be taken into consideration when installing solar A/C are:
- your location,
- the season,
- the weather,
- the size and type of solar installation,
- your electricity consumption,
- your local utility pricing…
All of these affect the simple question of how much a solar air conditioner will actually save you.
However, the major factor is your location. If you live in hot-humid or hot-dry/mixed-dry areas, the solar air conditioner will work with maximum performance and can save you up to 90% on electricity bills.
During summer a considerable portion of our electricity bills come from air conditioning requirements.
That’s why switching your old air conditioner to a more energy-efficient air conditioner that runs on solar energy can help you reap the benefits of solar energy and cut down our electricity bills significantly.
But besides saving on electricity bills, there is another hidden benefit of installing a solar air conditioner… and that’s the TAX ADVANTAGE (but only if you act quickly)
Why Now Is The Best Time To Invest In Solar Air Conditioner?
People who are specifically buying solar products such as solar air conditioners are in a good position now because they can enjoy several benefits and incentives backed by the government.
The US government is allowing several subsidies and tax cuts for solar investments.
Buyers are allowed to cut as much as 22% of the cost of their solar air conditioner (or any solar product for that matter) from their annual federal tax returns in 2021.
Obviously, this tax cut would not be there for long as more and more people hop on the solar band-wagon.
That’s why you have to act quickly!
This investment tax credit was devised under the Energy Policy Act of 2005 and was set to expire at the end of 2007. However, Congress pushed the expiration date to 2021.
As you can see from the image, the tax credit percentage was greater in the previous years, and has shrunk down in each successive year.
From 2022 onwards, the tax credit amount will decrease down to only 10% of the total solar investment, as compared to 22% being allowed for this tax year.
The eligibility criteria for this tax cut is simple – you just have to be the owner of the solar installation of the solar product.
You can enjoy the further benefit of rolling down your remaining tax credit to the next year, if their tax credit amount outweighs the tax returns that you have to pay.
However, next year the tax credit will be calculated according to the percentage for that year.
Moreover, the tax credit is not only limited to our solar air conditioner.
The tax credit policy includes the labor costs that go into installing the system and all other equipment that goes on to become the part of the whole system, like mountings, wiring, etc.
Although, the accompanying devices and equipment would be minimal when installing our solar air conditioner, but in case of more general solar power system installations, devices like storage batteries, inverters, cables, racks… will also qualify for the tax credit.
So with a 22% tax credit allowance, a system costing $10,000 would come down to $7,800 after adjustments.
How To Cut Taxes With Our Solar A/C – Step By Step Guide
If you want to know how to claim your solar tax credit with Alpcool, you can follow our ultimate step-by-step guide. You will discover:
- How investment tax credit (ITC) actually works
- How to claim your investment solar tax credit
- Step-by-step instructions for filing IRS form 5695 & 1040
- How to save thousands by pairing Alpcool Solar A/C with your solar water heater.