The Solar Investment Tax Credit, also known as the ITC, which was scheduled to drop from 26% to 22% in 2021, has been extended for 2 more years. This extension was included in a $1.4 trillion federal spending package. What does this mean for residential solar customers? It means that all solar projects that begin construction in 2021 and 2022 will still qualify for the 26% tax credit. In 2023, homeowners will qualify for a 22% tax credit and in 2024 it is expected to drop down to 0%.
The ITC extension has been supported by many including congressional leaders and some bipartisan mayors. There have been various bills in the last few years in an effort to extend the solar ITC, but nothing has stuck until now.
President and CEO of the SEIA stated:
We are heartened to see Congress step up to provide Americans with some relief after our country has been mired in a public health and economic disaster. This pandemic has taken an immeasurable toll on American families, and our deepest sympathies are with those who have lost loved ones and those who are suffering economically because of the ongoing crisis. Over the next few years, we have an opportunity to build a stronger, more reliable, and more equitable American energy economy and the action Congress is taking today is a helpful down payment.
This is great news for homeowners, many of which are still recovering and enduring the current effects of the pandemic and the economic crisis.