It’s no surprise at all that Florida is seen as a premier state for solar energy. After all, the name “Sunshine State” is more than a moniker. It comes from the fact that Florida averages 237 days of annual sunlight. Therefore, it presents the “perfect storm” for its subset of US citizens to save on electric expenses.
Below, you’ll learn about Florida solar benefits, such as net metering, alongside other incentives that you can take advantage of. We will guide you on how to find incentive programs you want and increase the efficiency of your solar power initiative.
What Is the Federal Tax Credit?
Put simply, this tax credit is a benefit that you can claim on federal income taxes, and it corresponds to the cost of your solar system, assuming you are the one who paid for it. Therefore, it’s not going to apply to systems that are linked to leases or other agreements where you are not the owner. Note that other renewable energy types have similar credits, but those would be irrelevant here. Finance is a key here.
To be eligible for solar incentive, the system in question must have been installed during the tax year that you’re claiming. At the time of writing, the program is only expected to be around until 2035. This will be the case unless Congress decides to renew it. Just in case you’re wondering, there isn’t a cap on the amount that you can claim since it is a percentage-based metric.
Can People in Florida Claim the Federal Solar Tax Credit?
Federal benefits tend to extend to the state level, which means that residents of Florida can claim the federal solar investment tax credit. You may also see it being called the Residential Clean Energy Credit.
Bear in mind that it’s also a common practice to pair battery storage with a solar panel system. This is incredibly convenient, considering that the energy storage systems are also eligible to form a part of your claim.
What Kind of Expenses Will Be Included?
While you have an idea of a couple of the expenses that are included and those you can claim against, knowing them all will be more beneficial period to that end, here are the expenses that the tax credits factor in:
- Your solar PV panels or PV cells. This includes any that may be used for powering an attic fan, but the actual fan will not be included.
- Any energy storage devices such as your solar batteries with at least a 3 kWh capacity rating (applies to systems installed any time after December 31, 2022).
- While energy storage devices are subject to certain installation date requirements, they are still eligible if installed in a later tax year than that during which the actual system was set up.
- The balance of system equipment involved. This will include mounting equipment, inverters, wiring, etc.
- Costs associated with contracted labour. Developer fees, permitting fees, inspection costs, or any other labour costs associated with installation, assembly, or preparation are included here.
- Any sales taxes that apply to eligible expenses.
Are There Incentives Specific to Florida?
Now that Florida solar incentives inherited from the federal level have been covered, it’s time to talk more about those that are specific to the state of Florida.
Florida Net Metering
Most homeowners in Florida who have solar energy systems set up will meet the eligibility requirements for net metering. Essentially, you’re given unique credits that can be used toward your electric bill.
First, there’s the case in which your solar panels are producing more electricity than you actively use. In this case, the excess will be sent to the electricity grid, which will be used to power businesses and other homes nearby. You get compensated in the form of bill credits, considering that you are meeting a portion of the need to produce electricity.
Next, there’s the case where you need more power than your panels can produce. When this happens, the grid will provide excess electricity. Upon recording how much power you’ve used, the electric company will charge you for that amount, but any previous credits you’ve earned will be deducted.
The actual charge comes at the end of the month, and at this point, you’ll be billed for your net usage. This is calculated as the difference between the amount of electricity your panels were able to produce and the amount that you used.
In Florida, one-to-one net metering is offered by all four investor-owned utility businesses, as well as several electric cooperatives.
Property and Sales Tax Exemptions
Florida solar system implementations are great for more than rebates. You can also benefit from an increase in your property value from having one set up. The Sunshine State happens to be one of several that has a 100% property tax exemption for any residential solar panels, and this extends to their battery storage devices.
In other words, the value of your home is increasing, but you’re not paying any increased property tax just because you got solar panels installed.
Additionally, there is a sales tax exemption under State law. This covers any equipment or components that the Florida Solar Energy Center certifies. These could be panels, solar batteries, wiring and disconnect switches, mounting hardware, inverters, or any other certified accessories that are functionally required.
Utility Rebates in Florida
While you will need to verify availability based on your provider, there are some electric cooperatives and municipal utilities that may offer additional solar rebates that are not covered here. It’s always a good idea to explore all the potential benefits you can get from a rebate since you want to offset the total cost of solar system as much as possible.
Conclusion
As you can see, there is quite a laundry list of incentives that you can take advantage of as a solar system owner in Florida. It starts at the federal level, but extends to state-specific benefits that can help you manage the cost of your operational expenses, while reclaiming the value of your panel installations as quickly as possible. You can go solar and cut your monthly bills. Going solar is easy when you purchase and install the best solar energy system on the market.
It doesn’t hurt to know that you’d be increasing your property value too, just by going down the road of solar energy. Even if you are not a big fan of going solar, working with the right local installers can save you a lot of money. Having as much information as possible on local solar installation companies and their offers can change your opinion on going green. For example, knowing how much you can make per year and how much you will need to pay per kW⋅h will be an answer to the question of whether you need many new solar panels or if you should just concentrate on your savings including 401k and avoid all this solar energy trend.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
