{"id":3040,"date":"2021-08-23T20:53:04","date_gmt":"2021-08-23T20:53:04","guid":{"rendered":"https:\/\/powur.solar-energy-quote.com\/?p=3040"},"modified":"2022-05-31T17:22:10","modified_gmt":"2022-05-31T17:22:10","slug":"solar-tax-credit-investment-tax-credit","status":"publish","type":"post","link":"https:\/\/powur.solar-energy-quote.com\/solar-energy-companies\/solar-tax-credit-investment-tax-credit\/","title":{"rendered":"Understanding the Solar Tax Credit or Investment Tax Credit"},"content":{"rendered":"

If you\u2019ve done research on installing solar panels on your home, you\u2019ve probably heard about the federal Investment Solar Tax Credit or ITC. What is this tax credit, exactly, and how does it work?<\/p>\n

Overview of the solar tax credit<\/h1>\n

First of all, let\u2019s clarify what a tax credit is. Simply, put a tax credit gives you a dollar-for-dollar reduction in your income tax.<\/p>\n

It\u2019s really simple. When you install solar panels for your home. the federal government gives you a rebate on your taxes. It’s for 26% of the value of your solar power system.<\/p>\n

The solar tax credit is one of the biggest values for homeowners if they choose to install a home solar power system. For example, if you decide to install a solar system for your home and it costs $30,000, you will get a credit for 26% of the total solar system cost.<\/p>\n

Now you\u2019re likely financing your solar system, so your out-of-pocket costs would be zero. You still get a tax rebate for 26% of the $30,000 solar system. It is really important to take advantage of this generous federal subsidy to support the use of renewable (solar) energy and save money on residential solar panels as a consumer. This tax credit is not going to last indefinitely.<\/p><\/blockquote>\n

When you do your taxes at the end of the year you simply include the cost of your home solar power system and the government is going to send you a check back for that amount.<\/p>\n

Will the solar tax credit (ITC) expire in 2022?<\/h1>\n

No. According to Energy.gov, as of December 2020, Congress passed an extension of the ITC, which provides a 26% tax credit for systems installed in 2020-2022, and 22% for systems installed in 2023. The tax credit expires starting in 2024 unless Congress renews it.<\/p>\n

There is also no maximum on the amount that can be claimed during this time.<\/p>\n

For solar, the legislation provides a two-year extension of the ITC at its current 26 percent through 2022 and at 22 percent through 2023, as well as an extended January 1, 2026, deadline for completing projects that have claimed the credit based on when they started construction, under “safe harbor” provisions.<\/p>\n

(A safe harbor is a provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given rule.)<\/p>\n

The incentive schedule is as follows:<\/p>\n