Written by: Leonard Parker | Solar News | 25th March
Tucked into the massive Covid relief package passed by Congress at the end of 2020 is a provision that extends the solar investment tax credit (ITC) at a rate of 26% for two more years! Prior to the passing of the bill, the ITC was scheduled to drop from 26% to 22% at the start of 2021. Now, both homeowners and businesses can enjoy a 26% tax credit on solar installations (as well as batteries when connected to solar projects) through the end of 2022.
Solar projects that begin construction in the next 2 years in all markets will be eligible for the 26% tax credit, with an expected drop to 22% scheduled to start in 2023. Small scale solar will fall to 0% in 2024, and large-scale commercial and utility solar projects will sit permanently at 10%. For a residential solar installation in the 7kw range, the 26% tax credit can result in savings of over $7,000.
This is good news for homeowners and the planet – securing the ability to go solar at a competitive financial price and supporting the overdue transition to zero carbon energy. Going solar as fast as possible benefits everyone, including those who don’t even install solar panels, who benefit from lower grid costs and a cleaner environment.
The bill, which also allocates billions of dollars towards clean energy research and development, bodes well for future bipartisan commitment to fighting climate change. To achieve meaningful greenhouse gas emission reduction, we will need to expand the accessibility of clean energy technologies, and that will require support from the new administration, Congress, and the American people.
“At a time when so many Americans need good jobs, and the need to reduce carbon pollution is more urgent than ever, this two-year extension of the 26% solar investment tax credit will create thousands of new clean energy jobs while accelerating the transition away from fossil fuels,” said Phil Coupe, co-founder of ReVision Energy.
For full details on how the extended tax credit benefits homeowners and businesses ready to go solar in 2021, read our full guide to tax credits and other incentives.
More people take advantage of the financial and communal benefits of solar, especially here in the sunny Northeast. With the extended tax credits available to homeowners and businesses, we’re gearing up for a busy 2021 and a brighter future. If you’re ready to join the solar movement, fill out the widget below and get in touch with our team!