The history of the federal solar investment tax credit
The ITC was originally established by the
Energy Policy Act of 2005 and was set to expire at the end of 2007. Thanks to the popularity of the ITC, and its success in supporting the United States’ transition to a renewable energy economy, Congress has extended its expiration date multiple times,
including most recently in December 2020 to extend the ITC at 26 percent for two additional years. Now, the solar investment tax credit is available to homeowners in some form through 2021. Here are the specifics:
- 2016 – 2019: The tax credit remains at 30 percent of the cost of the system.
- 2020-2022: Owners of new residential and commercial solar can deduct 26 percent of the cost of the system from their taxes.
- 2023: Owners of new residential and commercial solar can deduct 22 percent of the cost of the system from their taxes.
- 2024: Owners of new commercial solar energy systems can deduct 10 percent of the cost of the system from their taxes. There is no federal credit for residential solar energy systems.