Solar Investment Tax Credit (ITC)
The solar Investment Tax Credit (ITC) is one of the most important federal policy mechanisms to support the growth of solar energy in the United States. Since the ITC was enacted in 2006, the U.S. solar industry has grown by more than 10,000% - creating hundreds of thousands of jobs and investing billions of dollars in the U.S. economy in the process. In 2015, SEIA successfully advocated for a multi-year extension of the credit, which has provided critical stability for businesses and investors. Despite the overwhelming success and popularity of the ITC, the value of the credit will, unfortunately, start decreasing after 2019.
SEIA also supports legislation that would extend the benefits of the Investment Tax Credit to energy storage.
- The ITC is a 26 percent tax credit for solar systems on residential (under Section 25D) and commercial (under Section 48) properties. Section 48 commercial credit can be applied to both customer-sited commercial solar systems and large-scale utility solar farms.
- The residential and commercial solar ITC has helped the U.S. solar industry grow by more than 10,000% percent since it was implemented in 2006.
- 26 percent for projects that begin construction in 2020.
- 22 percent for projects that begin construction in 2021.
- After 2021, the residential credit drops to zero while the commercial credit drops to a permanent 10 percent.