The COVID Relief Bill added a 2-year extension for the Solar Tax Credit (ITC).
The COVID relief bill that was passed at the end of 2020 finally gave us some aid and good news heading into 2021. This new relief bill added a 2-year extension for the solar tax credit (ITC) at 26%. Initially, this tax credit was going to drop to 22% in the year 2022 and then down to 0% afterward. This tax credit extension is great news for people still looking to get solar and is another step towards widespread clean energy initiative goals across the United States.
What is the Investment Tax Credit (ITC)?
In 2005 the Energy Policy Act was enacted and ITC (also known as the federal solar investment tax credit) was created. Using ITC allows for the installation costs of solar energy systems (both commercial and residential) up to 26% to be deducted. Therefore, anyone who owns their solar energy system is able to claim the one-time solar investment tax credit when they file their federal tax return. That percent deduction comes back to you as cash-back meaning you get to do whatever you want with it, such as solar financing or adding to your savings. According to Energysage, ITC has helped the average solar customer save, “nearly $9,000 on the cost of going solar.” Another great reason to invest in solar.
What is different about this ITC extension?
The first version of ITC established in 2005 was to expire at the end of 2007. This did not happen because the solar investment tax credit was and continues to be very popular, and this led to its expiration date being extended multiple times. JD Supra states that the new COVID-19 relief legislation, “ …provides a two-year extension of certain time-based requirements or amount limitations pertaining to the ITC for solar and certain other qualifying renewable energy production technologies…” Thus, the 2020 COVID Relief Bill continues the 26% federal solar investment tax credit deduction level until the end of 2022, decreasing to 22% in 2023, and to 10% in 2024.
How does ITC help solar projects?
Homeowners and other prospective solar customers can benefit from the solar tax credit (ITC) extension allowing solar to continue to be a great investment. More solar projects also mean more jobs across the United States in the fields of solar innovation, technology, companies, construction, and other solar energy work. Current studies have also shown data that projects solar and other clean energy alternatives will overtake prior fossil fuels for primary energy usage in the next decade. Which is a win-win situation for both people and the planet.
Now is a great time to go solar.
Invest in solar and take advantage of the 26% ITC extension! Sungenia Solar Solutions is a trusted company to help provide affordable solar power throughout San Diego County. Take a look around our website to learn more about local solar rebates and other incentives, such as referrals through our Sungenia App. Contact Sungenia to let us help you simplify the solar process, provide the best equipment for your home, and to find out how much you could save on your solar energy system.
Sungenia’s mission is to make the solar process as simple and honest as possible, provide the best solution, and to make as many happy friends as we can.