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  • The solar and renewable energy industry exhaled a giant sigh of relief Friday as the details of the GOP Tax Reform Bill were released, and it was revealed that the solar Investment tax credit, the driving force behind much of solars' recent growth, was preserved.  Due to President Trump's rhetorical skepticism of solar and climate change, many solar companies were worried that the trajectory of the ITC would be modified.  The result is that nothing has changed, and optimism for the future of the solar renewable energy industry has been renewed.
     
    For those that don't know, the Solar Investment Tax Credit, or the Federal Solar Tax Credit as it is sometimes called, is a 30% tax credit you get when you install solar.  So basically, if you install solar before 2020, you can deduct 30% of the cost of the solar from what you owe on your taxes. These tax incentives were first established by the Energy Policy Act of 2005, signed in by former President George Bush, and was originally set to expire by the year 2007. Luckily, due to its success, and its effect of a wide and vast deployment of solar, Congress extended its expiration through 2021.  The amount of credit you get changes each year, and rolls out as follows:
     
    2016 – 2019: Tax Credit is 30% of the cost of the system.
    2020: Credit declines to 26%
    2021: Credit declines to 22%
    2022 onwards: Only commercial projects will qualify for a 10% tax credit.
    This trajectory was called in to question with the new GOP tax bill.  But, due to some solar supporters in Congress, the ramp-down of residential credits into 2021 has been preserved in the final bill, as well as the 10% credit for commercial projects beyond 2021.  
     
    The Solar Energy Industries Association, a non-profit group that oversees energy policy and promotes the use and deployment of solar in the US, had this to say in an official statement about the extension of the ITC: 
     
    "Today marks the second anniversary of Congress extending and reforming the solar Investment Tax Credit (ITC). SEIA appreciates the hard work of our solar champions in Congress to ensure that the tax reform bill maintains the ITC in its current form."
     
    While going solar sooner than later is always a better deal, this ensures that homeowners who install solar will be getting a great deal for years to come.  This should allow the interest in solar to continue to grow and should promote widescale implementation and growth for the remainder of the tax credits life.  Needless to say, those of us in the renewable energy industry are applauding this decision by Congress.

  • About the Author

    Michael Powers

    http://www.terrawatts.com/

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    Michael is one of the founding partners of Stellar Solar. In 2001, he helped launch The Home Depot’s national solar energy program which is now offering home solar through hundreds of stores in nearly a dozen states. He is a writer and marketing professional with over 30 years’ experience in the fields of energy, market intelligence and leadership training. He currently serves as treasurer and board member of Global Energy Network Institute (GENI), a San Diego-based non-governmental organization that advocates linking renewable energy resources around the world using electricity transmission.