Last month the SEIA, Solar Energies Industries Association, vocalized their dissent of the upcoming reduction of the solar ITC, Investment Tax Credit. The ITC is dollar for dollar, federal tax credit worth 26% of homeowner or company’s solar investment. The tax credit will save you money. It is a policy passed by Congress to incentivize and help with the transition to solar power. The SEIA is calling on Congress to pass an extension to the ITC. The current rate is 26%.
ITC Drops to 22% in 2021, then 0% in 2022
This is the final month for the current 26%. The ITC drops to 22% in 2021. The rate will be reduced by 4%, just as it was from 2019 (30%) to 2020 (26%). By 2022 the ITC rate will bottom out to zero. For companies and utilities, the rate will drop to 10%. The best opportunity to invest in solar is now. With less than a month to go, the window of opportunity is closing.
Bipartisan Bill Introduced in the House
Also, last month Rachel Frazin of The Hill wrote, “The House legislation introduced by Reps. Mike Levin (D-Calif.) and Dave Schweikert (R-Ariz.) would temporarily make the solar Investment Tax Credit (ITC) refundable, meaning that the amount of money that solar producers receive from the tax credit may exceed the amount that they owe in taxes.” The report on the proposed bill does not necessarily mean it is destined to become a law. The fans of SchoolHouse Rock will understand. Frazin continues, “a new report released Wednesday has found that through October about 12 percent of the renewable electric power generation workforce remained unemployed because of the pandemic.” This Bill will incentivize prospective solar users and give traction to the recovering solar industry.
The SEIA Praised the Bill
Responding with a comment, Jeremy Woodrum, the director of Congressional Affairs at SEIA, stated, “this bipartisan legislation would help address key issues facing the solar industry as a result of the COVID crisis, and support hardworking men and women deploying clean solar energy across the country. Enacting these pro-solar measures would go a long way toward jumpstarting clean energy projects and easing some of the economic impacts of COVID-19.” The SEIA is on board. However, once again, it is Congress that will ultimately decide. Congress has not been called to vote on this bill just yet. Still, Frazin wrote, “supporting clean energy may be one of the few areas for potential cooperation in what could be a divided government next year if Republicans retain control of the Senate.”
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It should be emphasized that this is the final month of the current 26% ITC rate. Equipment, installation, panels, and everything between is included in the tax credit. It is the future of energy. Depending on the state you live in, you may have additional incentives in the form of credits or rebates. If you’re interested in learning more about the advantages of going solar, check out our blog. To receive a free quote, click here.
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