30% of the costs of a solar or battery storage system are paid for with the Solar Investment Tax credit. The Solar Investment Tax Credit (ITC) is the biggest renewable energy incentive in the country, and helps make solar affordable for just about every business or homeowner in the U.S. with a sunny rooftop. The solar ITC has been around for almost ten years – but 2019 is the last year that it is in full effect.
The solar ITC steps down to 26% in 2020, 22% in 2021 and zero for residential systems in 2022. As in year’s past, there will be a big rush to get systems installed before the end of the year – and even a bigger rush at the end of this year since systems will effectively be 4% more expensive on January 1, 2020.
Moreover, California’s public utilities have put their foot on the solar + battery storage accelerator with upcoming Public Safety Power Shutoff announcements. The 30% tax credit fully applies to battery storage systems used for backup power as long as the battery is charged by solar at least 75% of the time. Businesses and homeowners are realizing that a clean, renewable, and quiet solar + battery backup system is more reliable and cost effective than traditional built-in gas and diesel generating systems.
The solar ITC is a straightforward credit (not deduction) on your business or personal tax return, and is not affected by the alternative minimum tax. Other incentives, such as business equipment depreciation, can also be combined with the solar ITC – in many cases cutting the total cost by 50% or more. To learn more about how your home or business can leverage the Solar Investment Tax Credit for both energy and backup power, tune in to this week’s Energy Show.