The Solar Investment Tax Credit was extended until 2022.
The Consolidated Appropriations Act combines the 900 Billion dollar stimulus bill with the $1.4 trillion omnibus spending bill for the 2021 federal fiscal year. This was passed in December of 2020.
One of the great provisions of the Consolidated appropriates act as far as homeowners are concerned? The act extended the solar credits at the current level of 26 percent for two years.
The Federal tax credits were installed several years ago with the purpose of allowing homeowners to recoup the cost of installing solar panels by allowing homeowners to discount a significant amount of the expense of installing solar panels directly on their income tax.
The program is known officially as the Investment Tax Credit. And whether it be for a residence, or for a business, the solar Investment Tax Credit is available.
Historically, the solar tax credit first became available in 2005, and back then the maximum amount of credit was 30 percent of your panel and installation costs.
The program was set to expire in 2007 but it was so popular that it was extended. Then in 2015, it was extended again.
The 2015 extension, saw the Federal Government provide a maximum of 30 percent rebates until the end of 2019. In 2020, the rebate dropped to 26 percent. In 2021 the rebate was set to drop to 22 percent but The Consolidated Appropriations Act changed the deadlines.
As it now stands, the tax credit rebate of 26 percent in 2020 has been extended until the end of 2022.
What happens next?
In 2023, the tax credit is still operational, although the ITC rebate on your taxes drops to 22 percent, the amount that was originally set for the year 2023.
However, in 2024, the ITC rebate totally disappears for residential homeowners. There is, however, a 10 percent credit for commercial solar energy systems.
In case that went by you too fast, here's a short recap:
2021 - 26 percent rebate.
2022 - 26 percent rebate.
2023 - 22 percent rebate
2024 - No tax rebate available for residential homeowners A 10 percent tax rebate is available for commercial solar systems.
(To qualify for the ITC customers must have their solar installation completed in that year.)
Will the rebates be extended in the future? Hard to say as the rebates have been extended twice before. So maybe yes, as it stands at the moment, there are no current bills in Congress to extend the tax credit further.
Prior to the extension of the tax credits for 2021 and 2022, the Solar Energy Industry Association began lobbying congress for the extension reported that solar energy was growing at a rate of 48 percent a year. With the extension of the tax credit, the industry is expected to keep growing to meet the growing demand for solar power.
Now is the time to go solar before the tax credit is gone. Get a quote now from SunPower by The Solar Quote to get started!