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  • Writer's pictureBrad Morton

How to Apply the Federal Solar Tax Credit to Roof Replacement & Repair

Updated: Dec 1, 2022

When many people think about adding solar to their home or business, they’re looking to save money. One key way to do this is with a federal tax credit known as the Federal Solar Tax Credit. While the amount you can deduct from your taxes with this program changes by year, it is currently 30% (through 2032) of the installation costs of adding solar panels.

However, what many people want to learn about is whether they can deduct any roof repairs necessary prior to installing solar panels. The answer is yes, but there are quite a few stipulations to consider. Here is what you need to know about applying the federal solar tax credit to roofing replacement and repair.

1. You Must Own the Solar Panels

This is one of those questions that we get sometimes that needs to be clarified. In order to apply the cost of roofing repair or replacement to your federal tax credit, you cannot lease your panels and must purchase them outright.

This is probably the biggest disqualifier for a lot of people around the country. While they’re in a place where they can install solar, they don’t have the means to be able to purchase panels outright. And that’s totally okay. However, if you are able to and you need roof repairs before installation, buying your panels is something you really should consider.

However, let's clarify this a bit for those in our local service area. Taking out a loan for your panels is still considered owning them, much like you're still considered a homeowner if you have a mortgage. Furthermore, leasing is not an option in Indiana or Kentucky and Morton Solar does not lease panels to any of our customers in Illinois. So, depending on your situation and where you live, this might not even be an issue.

2. There Are Certain Situations That Must Be Present

Another thing you need to know about including roofing materials and labor from your federal tax credit is that there are a couple of situations that need to be considered. The law specifically states that your existing roof must not be able to handle the weight of adding panels. Furthermore, you might be able to deduct some costs if special shingles or decking is needed to upgrade your roof to the right standards for solar.

To be clear, this is when there’s a current issue with your roof that makes it not suitable for panels. It is not for frivolous upgrades or just the roof materials being several years old.

3. Installation Costs of Roofing Materials Are Not Included

The current tax breaks for energy improvements on your home or business do not include the labor costs for having your roof repaired or replaced. That means that if you’ve met the two criteria pieces we’ve mentioned above, you won’t be able to deduct the cost of installation or labor.

This is another key factor that not too many people realize when they’re looking at having their roof redone before solar panel installation. However, it is definitely something that will come up come tax time, making it very important to be aware.

4. You Have to Own the Building

This is another overlooked caveat that comes into play when including roof repairs in the Federal Solar Tax Credit. In order to qualify for the savings, you have to own your home or business location.

This means that you can’t be a renter or a part of some other agreement. Your name or company must match the title deed for the property to receive the savings. In most cases, this is more of an afterthought, as most landlords wouldn’t readily agree to a tenant suddenly adding solar panels and paying for roof repairs anyway.

Warning: Consult with a Tax Professional

We feel this is a good time to add a little disclaimer. While we know a lot about the solar industry and how to maximize savings for our customers, our Morton Solar team are not tax professionals. Thus, it is important to consult with your trusted accountant or tax attorney before making a decision to have your roof replaced in order to claim additional benefits via the federal tax credit.

When having this discussion, your financial advisor will likely want to know the condition of the roof and what factors necessitate having repair or replacement done prior to installing panels. In that case, our team would be more than happy to provide you with a written estimate.

Let Morton Solar Help with Your Solar Panel Installation

Are you ready to learn how switching to solar can save you money? The federal tax credit is just one of the many reasons why property owners in our area are giving us a call. Please get in touch with us today for a no-obligation solar estimate.

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