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Solar Tax Credit: Do New Roofs Roofs Qualify? (Insider Advice)

February 15, 2022

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Wondering about a solar tax credit on new roofs? What’s the best roof type to install solar panels on? Do your solar panels qualify for the federal tax credit? Is there a legal requirement to replace my roof before installing solar panels? Can I remove my solar panels and still claim the tax credit? How long do solar panels last? Should I wait until my old roof needs to be replaced before I get solar panels? Let’s clear up some of these common questions about the federal solar tax credit and how it can help you save thousands of dollars with a roof replacement tax credit!

Solar Panel Basics

Before we dig into solar tax credits let’s start with the basics around solar panels. Solar photovoltaic panels convert sunlight directly into electricity, which can be used to power anything from a major appliance or home computer to your garage door. 

The most common type of solar panel is known as a monocrystalline panel, which consists of a grid of cells. Each cell contains a single silicon crystal, which is pierced by one or more copper contacts to allow free flow of electricity. Monocrystalline panels are efficient and relatively easy to produce but can be rather pricey compared to other types of solar panels.

A cheaper alternative is a thin film solar panel, which uses an amorphous silicon layer. In contrast to monocrystalline panels, these are produced on flexible sheets that are easy to install and can be folded up or rolled up for easier storage. These panels tend to convert sunlight into electricity with less efficiency than monocrystalline panels but at a fraction of their cost. This makes them ideal for installations where space or budget is limited.

roof with new solar panel installation

When Do You Need A New Roof?

If you’re looking at solar panels, one of your first questions should be when do you need a new roof. This is important because most energy companies might not work on older roofs—they want to know they won’t have to deal with any leaks or issues beneath where they plan to install their panels.

If you plan on replacing your roof soon, it’s best to hold off on solar panels until after your new roof is installed. Don’t worry this doesn’t mean you can’t go solar once your new roof is in place, these companies will be more than happy to work with you and install a system that not only looks nice but also provides clean energy for many years to come. 

If you don’t need a new roof soon, it’s likely that your roof has at least 5–10 years left. In most cases, you shouldn’t have to replace your roof until it wears out or is damaged.

Understanding Solar Tax Credits

Don’t install solar panels until you read about tax credits for your state. With so many companies vying for your business, it can be difficult to tell which installation companies offer a quality product and fair pricing. But most prospective customers are interested in two basic questions – what is a solar tax credit and how do they work? As energy costs continue to rise in states across America, more homeowners are taking advantage of solar power.

A tax credit is a subtraction from your taxes, whereas a tax deduction is an itemized deduction. Therefore, a credit can decrease your taxable income, while a deduction cannot. Also worth noting, credits are more valuable than deductions when you’re in a high tax bracket since they result in greater savings on federal and state taxes.

Tax credits and rebates are available from the federal level all the way down to local. With the average cost of solar panels at $25,014 you’ll want to take advantage of every savings possible. These savings can drastically reduce that cost. The federal government offers a 26% federal solar tax credit for roof replacement for individuals who install new roof and solar at the same time on their homes or businesses. On top of that state and local governments may be offering savings as well. Rebates vary by state but tend to be offered by local governments instead of state or federally like tax credits.

Savings Beyond Solar Tax Credits on New Roofs

Opting for solar panels creates a long term financial benefit. In addition to tax credits, your new roof will help insulate and protect your home’s contents better than an old roof would have. In effect, installing new solar panels can extend your roof’s lifespan longer than if you didn’t install them at all!

By installing solar panels, you’ll reduce your monthly energy bill. This can include electric bills for heating and cooling, as well as for lighting and appliances. Because utility companies charge higher rates during peak hours of electricity usage in summer and winter, you may even see significant savings on your monthly electric bill by investing in solar energy through a new roof.

solar on a new roof with tax credits

Environmental Benefits

Solar energy is one of those things that provides a lot of benefits for very little effort. When installed in your home, solar panels can generate electricity to reduce or eliminate your electricity bill and prevent more carbon dioxide from going into our atmosphere. The same goes for commercial buildings. If you’re in charge of a building, installing solar panels makes perfect sense both economically and environmentally.

Unfortunately, solar panels aren’t cheap. You could easily spend tens of thousands of dollars to install enough panels to produce as much electricity as you use every year. And that’s a big chunk of change for most homeowners and small businesses. But there’s a tax credit that can reduce those costs by 26% and it’s made financing solar energy systems a lot more affordable than before.

Solar Tax Credit On New Roofs: Solar Panels On a Roof Needing Replaced 

Solar panels and roofs don’t last forever, so if your roof is about to need replacement, you might be wondering how solar panels can fit into your plan. Your options will depend on a few factors including whether or not you have a solar tax credit available, when you plan to replace your roof, and what kind of plans you already have in place for when it comes time to replace it.

If you’re able to stay on top of your own roof maintenance, and your roof is in good condition right now, you may be able to keep using it for years to come. But if your roof is old or damaged, or you have no intention of saving up money in advance for a new one when it needs replacement, you might need to invest in solar panels later.

Trust our team at The Rhode Island Roofers to replace your roof and install the solar panels you need. Have more questions about receiving a solar tax credit on your new panels and roof combined? Give us a call.

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