Here’s why it’s a big deal for California homeowners.
California homeowners and solar advocates can benefit from the extended investment tax credit (ITC) as part of the recent stimulus package passed by Congress.
On Monday, December 21, 2020, the U.S. Congress passed a spending bill that included $35 billion in energy research and development programs, including a two-year expansion in the Investment Tax Credit (ITC) for solar power. This means solar projects that begin construction through the end of 2022 will retain the current 26 percent credit, rather than expiring at the end of 2020, which was originally intended under the previous law.
Under Section 48, the Investment Tax Credit is extended by two years, and will decrease to a 22 percent rate for projects that begin construction by the end of 2023.
How this affects homeowners and solar advocates
The approval of this bill gives incentive to homeowners nationwide, however, California residents in particular can consider this to be a massive tax benefit, especially with PG&E’s recent rate increases. The package includes extensions on the solar and wind production tax credit (PTC) and investment tax credit (ITC), energy efficiency incentives, research and development for clean energy technologies.
This also means taxpayers who have been scrambling at the end of 2020 to qualify a project under existing “begin construction” rules can likely breathe a sigh of relief, as they can push some existing contracts, deliveries and negotiations into 2021 and beyond. The solar tax credit also applies to commercial solar projects.
The extensions also take pressure off some projects that were struggling to meet deadlines because of supply chain delays due to COVID-19. So, as long as you own your solar energy system, you are eligible for the solar investment tax credit.
For those interested in claiming a solar tax credit, it is best to connect with a tax advisor, or connecting with experts in solar such as A.M. Sun Solar. Visit A.M. Sun Solar to learn more about tax credit eligibility and how to get solar today.
More about A.M. Sun Solar
A.M. Sun Solar is the local leader in custom solar solutions and installations on the Central Coast. For over 15 years, A.M. Sun Solar has provided high quality, cost efficient solar energy to residences and small businesses in San Luis Obispo, Monterey and Santa Barbara counties. With a wide variety of financing solutions available, affordable pricing, custom solutions and complete installations from permit to interconnection, A.M. Sun Solar is the go to local solar company on the Central Coast.