Now's The Time

GET TAX CREDITS FOR SOLAR

Tax policy can be complicated, and renewable energy-focused tax policy is no exception. But there are three big takeaways to get tax credits for solar:

  • There has never been a better, more affordable time to get solar for your school district, local government, or private sector business.
  • As the tax landscape changes, the time to act and embrace solar is now.
  • In Virginia and in other places throughout the United States, state and local policy has helped amplify the positive impact of tax credits. Working with a solar partner who understands how to maximize that impact for your project is essential.

26% Investment Tax Credit

Understanding tax policy and its impact on solar starts with a commonly-used acronym: ITC, which stands for Investment Tax Credit – a Federal tax credit established in 2006 which provides tax deductibility directly related to a solar project’s value. The goal of establishing the ITC was to help level the playing field for renewable energy against already-subsidized traditional energy sources, and it has been seen as a broad success, with Congress reauthorizing the program in 2015, and again in 2020.

Today, this re-authorization means that through 2022, the ITC will remain at 26 percent and then decline – in 2023, it will be 22 percent for all projects, and in 2024 will drop to 10 percent for commercial and utility-scale projects, and 0 percent for residential solar. Advocates and industry leaders continue to work with leaders in Washington on behalf of the ITC and other critical policies that provide certainty for solar customers and companies looking to create solar jobs.

A Win-Win For The Whole Community

Solar growth has not been just the results of tax credits, though. The declining cost of solar technology has played a significant role, with a 70% drop in the last 10 years (and a 50% decrease in Virginia in the last 5 years). Yet as these cost declines begin to level off, and the value of solar tax credits decreasing, leaders in the public and private sector are quickly realizing that now is the best time to embrace solar.

Tax credits play an important role in ensuring a fast return on investment for businesses considering solar, and helps draw private sector investment to public sector projects – a win-win for the entire community. The good news is that there has never been a better moment for solar’s expansion, with tax credits still a valuable resource, a leveling out of the cost of solar technology, and a mature U.S. solar industry that has providers with the experience needed to deliver on projects in every community.

Want to learn more about how Renewable Energy Credits (RECs) can impact your solar project?

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