If I Make a Solar Car Port, Can I Get the Solar Tax Credit?

What is a solar panel carport?

A carport is a shelter built beside a home for one or more automobiles that is made of posts supporting a roof structure. A solar panel carport, as it sounds, is a carport with solar photovoltaic (PV) panels installed on its roof. Solar panels absorb light from the sun and convert it into energy that can be stored and utilized as electricity.

By installing a solar panel carport, you achieve two important purposes with one structure: you protect your vehicle and you generate power you can use instead of paying for electricity. If you have an electric vehicle, you can use a solar panel carport to generate the power to directly recharge your vehicle’s battery. If you don’t have an electric vehicle, you can direct that energy to your home and supplement or replace your own utility grid usage or direct it straight to the grid itself to earn payment or energy credits from the utility provider.

In this article, we will discuss the differences between a residential and commercial solar panel carport, and how getting a solar panel carport makes you eligible for the Federal Solar Tax Credit.

What are the differences between a residential and commercial solar panel carport?

There are two basic types of solar panels you could purchase and install: solar energy residential and commercial arrays. As you might expect, commercial solar panels are significantly larger than residential ones. A residential carport is large enough for one or two cars or other passenger vehicles. A commercial carport spans entire sustainable parking lots for multiple vehicles.

A solar energy residential carport can generate power to provide for or supplement a home’s energy usage. If your residential solar panel carport generates more power than your home utilizes, you can sell that power back to the utility grid or store it in batteries for later use.

What is the federal solar tax credit?

The U.S. Internal Revenue Service (IRS) allows residential homeowners to deduct 30 percent of the cost of installing a qualifying solar panel system, including solar panel carports, from their federal taxes. You can also qualify for this credit by installing a solar water heater, geothermal heat pump, small wind energy system or fuel cell system. The official name for this credit is the Residential Efficient Property Credit, although it’s more commonly known as the Federal Solar Tax Credit.

Will the carport get you the solar tax credit?

A solar panel carport may qualify you for a federal tax credit.

Commercial solar parking canopies and sustainable parking lots, by contrast, are not eligible for the investment tax credit solar provides. Sustainable parking lots and solar parking canopies may, however, qualify a business for certain state or local benefits, depending on your location.

In 2015, the IRS extended the renewable energy gifts program, though with some changes. To qualify for the solar tax credit, a residential solar carport must be built specifically to house the residential solar array. Qualifying expenses include the costs for structural components and certain labor costs as well. To qualify for the credit, labor costs must be for preparation, assembly and/or original installation work performed on site. Wiring and piping work may also qualify for the credit.

To be certain you qualify for the federal tax credit for solar power and that you meet all the requirements to receive it, consult with a tax attorney before you start building a residential solar array carport or any solar energy projects. Note that DIY projects may not qualify for the credit.

How do you install a solar panel carport?

Before initiating solar energy projects like installing a solar panel carport, check with your local city and county governments to find out any building codes you may have to follow.

Many localities require you to get a building permit prior to starting work on building a carport, or any structure, on your property. After obtaining your building permit and any necessary local government approvals, you can find a licensed and qualified electrical contractor to begin work building your carport. Before your contractor can install solar panels on the roof of the carport, you must first also file with your local utility company to supplement or replace the power it provides you and, if applicable, sell your surplus to the grid.

How much does it cost to install a solar panel carport?

The costs to build a carport and install solar panels on its roof vary depending on where you live and the size of the structure you want to build or the amount of power you want to generate. When estimating costs, make sure to include the following expenses in your calculation:

• Solar inverter
• Solar panel framing system
• Installation professional

Current estimates in the U.S. for one solar panel are approximately $1 per watt. If you plan to save money on the project by building the carport and/or installing the solar panels yourself, confirm with your tax attorney beforehand that you won’t disqualify yourself from earning the investment tax credit solar provides or, if you do, that the cost-savings for doing the project yourself outweighs the tax credit you would lose out on.

Is it worth getting a solar panel carport?

A carport is a wise way to invest solar power provides for some households. Not all households or businesses, however, benefit equally from the opportunity to invest solar power offers.

To determine whether a solar panel carport is worth it for you, consider certain factors of your circumstances including the geography where you live, variations in the seasons and the direction and tilt of your roofline. All of these factors will determine how much direct sunlight your solar panels would receive. Your panels should be able to receive enough direct sunlight for enough hours each day and enough days of the year to produce enough power to make the investment worthwhile. Determining the long-term value of these government renewable energy gifts involves some calculations that can take you a bit of time but are well worth the effort.

Consider whether you plan to remain where you are for a significant length of time. If you are planning on moving soon, you may not benefit from the solar panel carport enough to recuperate your initial expense. On the other hand, if you own your home and are planning on selling it before you move, installing a solar panel carport may increase the value of your home and, thus, the purchase price it can command for you. Likewise, if you desire to take out a home equity loan or home equity line of credit, the increased value from a solar panel carport on your property can improve your chances of being approved and/or increase the amount for which you qualify. Loans and lines of credit aside, the longer you plan to remain in your home, the more time you have to recuperate your initial costs of setting up the solar panel carport and start saving, and perhaps even earning, more money by generating your own power.

What are the pros of going solar?

Installing a solar panel carport serves many benefits, including economical and social ones. In addition to the 30 percent federal solar tax credit on qualifying installations, you may also qualify for the following financial benefits:

• Rebates from your utility company and/or your county.
• Rebates and/or tax credits from your state.
• Solar feed-in tariff paid to you from the utility company for the power you sell to the grid.
• Reduced utility bills.

If the utility grid in your area goes out, you can provide your own power with a solar carport as long as there’s enough sun to absorb or available power in your battery stores. Solar panel carports also help to protect and preserve the environment.

The advantage of installing a solar panel carport rather than a ground-mounted solar system is that, with a carport, you don’t require additional land for your solar panels. You simply install the panels atop your carport, turning it into a dual-purpose structure.