Is 2020 your last chance at going Solar?
The current state of solar power use throughout the U.S.A suggests that we can expect a boom in the solar industry through and (hopefully) beyond the year 2024. Harnessing and using solar energy for day-to-day activities has helped American households gain independence from local utility bills. The Investment Tax Credit (ITC) of 2005 has been the key benefit of installing residential solar systems over the years.
Much credits for the increased rates of solar power use and generation go to the ITC. The Solar Energy Industry Association (SEIA) mentions that “Solar Investment Tax Credit (ITC) has provided industry stability and growth since its initial passage in 2006. In the last decade, solar has experienced an average annual growth rate of 50 percent.”
Yet, the ITC may not be here for long. Considering the benefits of installing a solar system, and the ticking-clock on the ITC, 2020 is the best time to install residential solar systems.
What is the ITC?
Investment Tax Credit (ITC) is the tax credit that you get upon installing and using a commercial or residential solar system. Tax credit is an amount of money that you can deduct from the total tax payable to the Internal Revenue System. (IRS)
How much tax credit can you get on your solar system?
The ITC for all solar power systems including residential and commercial ones stands at 30% till 31st December 2019. But, following a reboot on 19 November 2019, there have been some changes in the ITC that suggest:
Owners of residential and commercial solar systems, from the year 2016 to 2019, get an ITC of 30%
Owners of residential as well as commercial solar power systems get a 26% ITC, until 31st December 2020.
Owners of residential as well as commercial solar power systems get 22% ITC, until 31 December 2021.
The ITC on residential solar installations will drop down to Zero. Nonetheless, the ITC for commercial and utility-scale systems drops to and remains at a permanent 10%, after the year 2022.
Who will qualify for ITC in 2020, and who will not?
Any solar installations (commercial as well as residential) that are under construction before 31st December 2019 will qualify for a 30%, 26%, or 22% ITC.
- You will be eligible for the ITC if you install solar power in your house or any other residential property.
- Solar systems that you buy on loan or an upfront payment.
- Solar power equipment. (such as solar tiles)
- New constructed homes with solar systems do not qualify for ITC.
- Solar system installed in a house that is not your house will not qualify for ITC.
- Any solar system on a lease will not qualify for ITCYeter, in such cases, the company that provides the lee can get an ITC.
Why is it the best time to go solar?
Since the solar ITC has gone a massive change in November 2019, solar manufacturers have started to market solar products like never before. It will be easy to install a solar system as various companies are providing lucrative deals on solar power equipment.Use Project Sunroof, a tool from Google, to get an idea of the capacity of the solar system that you should choose for your house. Seek the expert advice of a local solar vendor to get a better idea of the ITC and solar equipment in your area. Feel free to send us any queries that you have on solar power. Think solar, think green!