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HISTORY OF SOLAR ITC
Originally established by the Energy Policy Act of 2005, the 26% ITC (Investment Tax Credit) has been a success in supporting the country’s transition to renewable energy. The 2020 spending bill has extended the solar ITC at its current level of 26% for two additional years, through the end of 2022.
HOW DOES IT WORK?
The minute you own a solar system, whether it is residential or commercial, you are eligible for this Federal Tax Credit. The 26% tax credit means that as a residential or commercial client, you can claim 26% of the cost of the system through federal taxes. This can be claimed when you file for your yearly federal tax return. You can receive 26% for systems commencing construction in 2020-2022, 22% for systems commencing construction in 2023, and 10% for systems commencing construction in 2024 or thereafter. Systems placed in service after 2025, regardless of when they commenced construction, can receive a maximum tax credit of 10%.
In 2021, owners of new residential and commercial solar can deduct 26% of the cost of their system.
In 2023, owners of new residential and commercial solar can deduct 22% of the cost of their system.
In 2023 and beyond, the residential credit drops to zero while the commercial credit drops to a permanent 10%. Commercial and utility-scale projects placed in service before January 1, 2026, may still qualify for the 26% or 22%.
For more information on ITC, click here.
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About the Author
Tara earned her BA in Sociology at SUNY Stony Brook and her Master of Public Administration at CUNY Baruch, both with a focus on environmental studies. She is also a “Semester at Sea” alumni, where she completed part of her degree while traveling at sea through several different global ports. In 2011, she was one of four U.S. Climate Change Professional Fellows for the Australia cohort, where she worked with Australian researchers, industries, and advocates dealing with energy and climate issues.
Prior to joining the EmPower Solar team, Tara was the Long Island Program Coordinator for Citizens Campaign for the Environment, where she organized educational and advocacy campaigns on various environmental issues on Long Island. She also spent three years as a “Young Island” blogger for the Long Island Business News. She has been active in various professional and environmental organizations, including the C3E Women in Energy group on LI and serves on the Advisory Board for the Renewable Energy and Sustainability Center at Farmingdale State College. Tara also co-founded two nonprofit organizations focused on smart growth and keeping young professionals on Long Island.
In 2018, Tara was named one of the Top 50 Women in Business by the Long Island Business News. She was also inducted into the Social Justice Distinguished Scholar Academy for her work in environmental justice issues in collaboration with Farmingdale State College.
As a charity boxer for the 2018 Long Island Fight for Charity, Tara raised over $18,000 for non-profits across Long Island. In her spare time, Tara enjoys hiking around Long Island’s parks with her husband and daughter or playing weekly beach volleyball with the EmPower Solar company team. Tara’s family has taken on the “Electrify Your Life” challenge, and recently added solar panels to her home that now cover 100% of her energy needs including a geothermal heating and cooling system, and an electric vehicle.