Investment Tax Credit Goes Down From 30% to 26%
The world is going Solar, and there’s a good reason that drives it to adopt better energy-generating technologies. Climate change is real and happening. Our rivers are shrinking at a tremendous speed, the ocean levels are rising, several species of both flora and fauna are becoming vulnerable. All this, and the credit goes to climate change.
In the year 2015, the Energy Protection Agency pledged to reduce the carbon pollution from power plants to a third by the year 2030, relative to the levels in 2005. The Paris Agreement, of which the U.S. was a part before the government withdrew, aims to halt global warming at 2.7° Fahrenheit (1.5°C) above Earth’s average temperature during the pre-industrial times.
How important is this small change?
As put by NASA:
Limiting warming to 1.5 degrees Celsius would reduce the number of people frequently exposed to extreme heatwaves by about 420 million, with about 65 million fewer people exposed to exceptional heatwaves.
Limiting warming to 1.5 degrees Celsius is expected to significantly reduce the probability of drought and risks related to water availability in some regions.
If we put it in simple words, climate change, even if 1.5°C seems little, will have adverse effects on the earth, all life forms, as well as non-living yet essential entities like water.
Is It a bigger concern for America?
As long as America was the part of the Paris Agreement, its citizens had a clear path that would lead them to the target set at the Paris Agreement. (of course, with the rest of the world!) Nonetheless, the scenario is different now. Revisions and amends in the energy standards have made it difficult for clean energy sources like solar to flourish.
The import tariffs on solar power products from Asian countries like China are averaging the rates of 31%. The hefty tariffs will cost us several thousands of clean solar jobs like it is happening now.
Is there no way out?
“Where there’s a will, there’s way.”
The above quote is deemed fit for the plight of solar in the country. Despite receiving an on-face disapproval from the congress, there are states, NGOs, Associations, and local-bodies that promote solar power with all they have got and more!
The revision in the Investment Tax Credits (ITC) further adds to the plight of solar.
As per the amends:
- From 2016 to 31 December 2019: Owners of residential as well as commercial solar power systems deduct 30% of the system cost from their federal taxes, under ITC.
- Until 31 December 2020: Owners of residential as well as commercial solar power systems deduct 26% of the cost system from their federal taxes, under ITC.
- Until 31 December 2021: Owners of residential as well as commercial solar power systems deduct 22% of the cost system from their federal taxes, under ITC.
- 2022 onward: The tax relaxation for residential solar power systems drops down to Zero. For commercial and utility-scale systems it drops to and remains at 10%
The catch here is that if a commercial system starts the construction before 31 December 2012, it may still qualify for a 30, 26 or 22% tax credit, only if it is up and running before 31 December 2023.
What Should You Do?
The average US household produces 7.5 tons of CO2 equivalents per year. Carbon emission is the prominent precursor of the greenhouse effect that is causing drastic climate changes. If climate change goes out of control, it will prove fatal to the existence of life on earth.
It's 2020 and we need to act now. As a responsible citizen, it is our duty to limit the levels of carbon pollution. Taking individual charge of the situation is necessary, hence adopting a few practices will help:
Talking about Climate change and generating awareness among friends and family.
Powering the home with renewable energy, such as solar
Buying energy-efficient bulbs viz LEDs
Investing in energy-efficient home appliances a.k.a Energy-star products
Reducing water waste by choosing fixtures with a water-sense label
It’s now or never
The world is playing its part to reduce the carbon footprint, why should we fall behind. By making the shift to technologies that meet our energy needs without emitting tonnes of carbon into the atmosphere, we will secure the future of generations that will come long after us.
States like California are still going strong with the power of solar, come what may! The local authorities and people of many regions, schools and universities are going against the tide and adopting clean solar energy. You too can be a part of this revolution, for much depends on your decision.
Once you decide to go solar, America gets strong and this will lead the government into reforming or at least introducing some relaxation in the ITC and solar taxes. Also, 2020 is the time when you’ve got to go solar. The clock is ticking and the ITC now offers 26% rebates in comparison with the 30% that was eligible till 31 December 2019.
Act now and make sure that it’s not too late for you and the planet !