Investment Tax Credit (ITC)
Today,The Investment Tax Creditis a leading incentive available, to convert your home or business to solar energy.
The Investment Tax Credit(ITC), also known as the Federal Solar Tax Credit and Solar Investment Tax Credit, was enacted by the Federal Government, as an intended strategy to promote renewable energy and expand the solar industry. The ITC was established by The Energy Policy Act of 2005. The intention of this act was to combat growing energy problems. This Act effectively changed US energy policy. It provided tax incentives (such as the ITC) for energy production of various types. It also provided sweeping reforms for fossil fuels with added accountability. However, revisions within the federal program since its inception have it even more lucrative.
Today, the Investment Tax Credit is a leading incentive available, to convert your home or business to solar energy.
WHAT IT IS:
The Investment Tax Credit or Investment Tax Credit (ITC) provides consumers with a Federal tax credit. The ITC is available for both home and business owners who invest in solar energy. The ITC provides a dollar-for-dollar tax deduction equal to 30 percent of the total cost of a solar investment from your Federal Tax filing. Simply put, you can deduct 30 percent of the cost of your solar system's installation.
The primary driver of the ITC is its value, at 30 percent of the cost of a solar investment, with no cap to the value. The ITC applies for all things solar; from solar panels and energy storage devices to complete solar energy systems.
HOW IT WORKS:
Any business or homeowner that OWNS their solar energy system is eligible for the Investment Tax Credit. If you lease your solar panel system or take part in a utility-scale project, you are not eligible for the ITC. The ITC applies to those who "own" their solar panel system, whether you purchase it directly or through financing.
Some homeowners might not have enough tax “liability” or enough income tax to claim the benefit in one year. Under new regulations, you can “rollover” the remaining tax credit the following year (as long as the program is still active). Thanks to new legislation, homeowners are eligible to receive the Investment Tax Credit as soon as construction for the solar panel system begins. New policies require the system to be operational before 2024. Previously, homeowners were not eligible until their solar panel system was in operation.