Solar Panels

[PennyO]

I am hoping I am asking in the correct spot for the free AARP advice. I am not wanting to change my personal tax help options.

My parents are considering solar panels. What advantages would they have in waiting till after the first of the year to get them put in?

What would they loose by getting them installed before the changes go into effect? 

[Anonymous]

Hello PennyO,

Thank you for participating in this Ask the Experts event. As to your question, from our blog:

"Before the Inflation Reduction Act, if you purchased residential energy efficient property like solar panels and solar water heaters for your home, the tax credit was 26% of your purchase. Under the new law the credit increased to 30% if you purchase the energy efficient equipment January 1, 2022 through December 31, 2032."

Therefore, because the change in law is retroactive to January 1, 2022, there really is no advantage to waiting in terms of the credit available to them. However, they may want to review their tax situation to see how that credit will help this year versus later (but you can carryover any unused portion into future years).

I hope that helps.