Solar incentives are government programs that give money to consumers to persuade them to invest in solar energy. There are many different solar incentives available to homeowners and businesses, such as the Solar Investment Tax Credits (ITC). It’s one of the most important solar incentives and has significantly contributed to the growth of the solar industry within the US. The ITC is a federal program that provides tax credits to consumers who invest in solar energy and projects. Below is an example of how they work. Tax liability is the amount of tax owed to the government. The tax credit is the amount of money you save from not having to pay the tax. 

The ITC was established by the Energy Policy Act 2005 in 2006 and planned to expire in 2007. Congress has extended the program multiple times. However, in 2019, an extension of the ITC was not included in the $1.37 trillion federal budget passed by Congress. In 2020, owners of new residential and commercial solar systems received a 26% tax cut of their total purchase price. This was a 4% drop from the year 2019 where the tax credit was at 30%. The tax credits will continue to decrease to 22% in 2021. According to the current status, the tax credits will expire in 2022 for homeowners and permanently stay at 10% for businesses. 

Contact us if you have any questions, we are more than happy to help you out!