Federal Solar Tax Credit 2019
The history of solar investment tax credit
The solar industry is booming, and it’s not just because everyone decided to go green. Solar’s huge growth in the past ten years has been largely attributed to the Solar Investment Tax Credit (ITC), better known as the Federal Solar Tax Credit. The Solar ITC, which was originally established by the Energy Policy Act of 2005, has allowed homeowners who go solar to earn a tax credit worth 30% of the cost of their solar installation.
This financial incentive to go solar in the form of tax credit has been hugely successful in supporting the transition to renewable energy in the US. Since the Solar ITC was enacted, annual solar installations have grown by over 1,600%, with a compound annual growth rate of 76%. As a result of this mass solar deployment, installation prices have fallen, while the technology and installation practices have become more efficient; a combination which has given the solar industry the leg up it needed to skyrocket into the future. So the Solar ITC has done it’s job, and it is a shining example of a tax policy success.
Where the solar investment tax credit is headed
Unfortunately, all good things must come to an end, as does the Solar ITC. That’s why homeowners who are considering solar should know that the 30% Federal Solar Tax Credit is coming to an end in 2019. We know, we don’t want it to end either, but it’s done its job, and now it’s time for the solar industry to stand on its own. The good news is that there is a multi-year phaseout of the Solar ITC. While the 30% tax credit will be phased out after 2019, there will be a 26% credit available for solar construction beginning in 2020, and 22% in 2021.
So homeowners who want to get the most out of their solar investment should go solar THIS YEAR to get the full 30% credit on their taxes. Only utility-scale solar, such as investor-owned utilities or commercial solar systems, can still get renewable energy credits beyond 2021. They can also get the federal solar tax credit on non solar pv systems such as geothermal heat pumps, fuel cells, or other energy efficiency installations but rooftop solar systems and ground mount solar installations for homeowners, the investment tax credit ITC will no longer exist after 2021.
Don't leave money on the table.
Beat the solar rush.
You have less than a year to go solar before the ITC ramps down. This is free money from the IRS to go solar. The ITC value on an average solar power system is around $7,500. We cannot stress enough that this is free money to go solar! If wait much longer you are simply going to miss out. Don’t expect the ITC to be renewed again, industry experts expect it to go away forever.
How the Federal Solar Tax Credit works
Every time there is a reduction in solar incentives for either residential or commercial solar, both home and business owners respond en mass to take advantage of the disappearing solar incentives. That WILL happen again in 2019 and our prediction is that if you don’t sign up for solar early in the year there is a strong chance your system will not be installed in time to get the full 30% tax credit. Now is the time to start researching solar and get your system installed in time.