Solar Investment Tax Credit - Explained
The Solar Investment Tax Credit or ITC for short was enacted in 2006. One of the most important federal policy initiatives to support a transition to more renewable energy, the ITC gives homeowners an incentive to switch to solar energy but only until 2021.
Since the ITC was enacted in 2006, the U.S. solar industry has grown by more than 10,000%.
It has created hundreds of thousands of jobs and generated billions of dollars in the U.S. economy in the process. However, despite the incredible success, the ITC credit value was not renewed and has started to decline in 2019 and will be the lowest percentage by 2022 at just 10%.
What does that mean for you as a consumer?
If you go solar by the end of 2020: Owners of new residential and commercial solar can deduct 26% of the cost of the system from their taxes.
If you wait until 2021: Owners of new residential and commercial solar can deduct only 22% of the cost of the system from their taxes.
2022 onwards: Owners of only new commercial solar energy systems can deduct 10 percent of the cost of the system from their taxes. There is no federal credit for residential solar energy systems.
So you've decided to go solar with one of our systems - YAY!
How do you qualify for the ITC tax credit?
As long as you purchased a solar energy system in 2020, you're eligible for the solar tax credit. If you don't have enough tax liability to claim the full credit in one year, you can rollover any remaining credit each year the ITC is still in effect (currently 2021). You will have to let your accountant know
However, if you sign a lease or PPA with a solar installer, you are not the owner of the system, and thus you cannot receive the tax credit. We don't rent you your clean power - you own your Solaris Solar Panel System.
Remember to let your accountant know you’ve gone solar in the past year, or if you file your own taxes don't forget to claim it.
Since the early 1970s, the cost of solar panel installations has fallen by over 90%. Making the switch to solar panel systems in El Paso, TX (where we enjoy 300+ days of sunshine) is a lot more affordable than you might think.