The Solar Energy Tax Credit

A major solar incentive is about to shrink. Here’s what you need to know.

 

The Federal Solar Investment Tax Credit (ITC) allows companies to get a break on the cost of a new solar installation as a reduction of the following year’s taxes. The Solar ITC lowers the cost of construction by more than 30% when accelerated depreciation of solar energy equipment is applied. 

The ITC has been extremely successful in facilitating the growth of solar energy in the US. Since its enactment in 2006 and multiple extensions with bipartisan support, the solar industry has grown by more than 10,000% and has generated hundreds of thousands of wide-ranging, well-paid, stable, local jobs for US workers.

Despite this progress, the ITC is set to phase out within the next two years and there has been a rush to install PV systems before these cost-lowering incentives disappear.

 

WHAT YOU NEED TO KNOW ABOUT COMING CHANGES

Last year the ITC was 30%, but reduced to 26% this year. Next year it will drop to 22%, then it will remain at 10% for commercial installations and disappear for residential customers.

If you want solar, waiting until next year will make a solar project more expensive because the ITC will get smaller as it phases to zero. 

Does an entire system need to be installed before the end of the year in order to get the full 26% ITC? Fortunately no, a solar project just needs to commence in calendar year 2020.

Don’t miss out on saving big with solar ITC savings. Complete your solar feasibility assessment this quarter (July-September) to generate final designs ready to sign and permit before the end of the year.

Schedule a free consultation to discuss how you can help build back better by investing in solar energy!

 
 
 
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April 2020 - Press Release