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What is the Federal Solar Tax Credit
The Federal Solar Tax Credit is available for Commercial Solar Power used in businesses. The Federal Solar Investment Tax Credit (ITC) is one of the most important federal policies to support the implementation of solar power. ITC gives a 30 percent tax credit to Solar Systems on a commercial property. The Solar Investment Tax Credit helps to reduce the tax liability for companies, or individuals, that purchase Solar Systems and qualify for the tax credit.
Tax policies that relate to renewable energy, are essential to create new, higher paying American jobs. They encourage economic growth, help to lower energy bills for businesses and consumers, and reduce pollution. The ITC is a stable, multi year incentive and encourages more solar construction and manufacturing.
History of the Federal Solar Tax Credit for Business
In 2005, The Energy Policy Act (P.L. 109-58) allowed a 30 percent investment tax credit (ITC) for residential and commercial solar energy systems that were installed from January 1, 2006 through December 31, 2007. The credits were extended for one year in December 2006 by the Tax Relief and Health Care Act of 2006 (P.L. 109-432).
The Emergency Economic Stabilization Act of 2008 (P.L. 110-343) added an eight-year extension of the residential and commercial solar ITC, and allowed utilities and companies paying the alternative minimum tax (AMT) to be eligible for the credit. The ITC was extended once again at the end of 2015. It is set to expire at the end of 2021.
Value of the Federal Solar Tax Credit
The investment tax credit for solar has been extremely successful in helping to lower the costs of solar energy and expand it’s footprint . Since the ITC was put into place, solar prices have continued to fall every year, and the efficiency of solar has continued to climb. The Solar Investment Tax Credit is proof that a reliable, long-term incentive can reduce prices and help to create jobs in solar energy.