By Tim Henderson
The Solar Investment Tax Credit (ITC), enacted in 2006, is easily one of the most important federal policies instituted in the last several decades.
Designed to support and encourage solar growth throughout the U.S., the solar ITC has generated 10,000% growth in the U.S. solar industry. In addition to promoting solar power for homes and businesses throughout the U.S., the ITC has created thousands of jobs, pumped billions into the U.S. economy, and raised awareness about solar energy across the world.
Despite the wild popularity of ITC, it has a built-in end date. Although lawmakers extended the program in 2015, the end is in sight. In fact, the value of the credit will begin decreasing at the end of 2019.
Back in 2006, when the ITC passed, it was set to last until December 31, 2016. In 2015, however, the U.S. Congress agreed on a bill that extended the ITC for five additional years, as one segment of a $1.15 trillion spending bill. Here are the critical details of the solar ITC extension:
Businesses or homeowners who invest in qualified solar properties in 2019 will receive an Investment Tax Credit equal to 30% of the cost. The customer can lock in an ITC at the 30% level as long as they are under contract and have expended at least 5% of the contract amount during the 2019 calendar year.
The same is true in 2020 for the 26% ITC and 2021 for 22%. Commercial customers starting their projects in 2022 and beyond will receive a 10% Investment Tax Credit while residential customers will no longer be eligible for a tax credit at all.
Wondering how you can take advantage of the ITC? Here’s an outline of the requirements for both commercial and residential projects:
The ITC is a valuable program, but it’s quickly coming to an end. If you have yet to go solar, now is the perfect time to do it. To learn more about the ITC or how you can claim your tax credit, contact Sandbar Solar today!
Tim has worked in the solar industry since 2008. He has a Master's Degree in Energy Resources Engineering from Stanford University. His years of experience include working on solar energy projects for both homes and commercial properties. Tim enjoys sharing his knowledge of this evolving industry and making a difference in his community.
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