- The federal Solar Investment Tax Credit (ITC) offers 30% of the costs to install solar as an income tax credit in the year after installation
- The ITC is the incentive program most responsible for the booming U.S. Solar Industry, but is currently set to be phased out over the next 3 years
- New legislation, cosponsored by several 2020 presidential candidates introduced into both chambers of the U.S. Congress seeks to extend the credit for 5 years
On July 25th, 2019, twin bills that seek a 5-year extension for the federal solar tax credit were introduced into the two chambers of the United States Congress.
The House bill (HR 3961), introduced by Representatives Mike Thompson (D-CA), Paul Cook (R-CA), and Brian Fitzpatrick (R-PA), enjoyed bipartisan support from 21 Democratic and 3 Republican co-sponsors, while the Senate bill, S 2289, was initially co-sponsored only by Democrats.
The ITC applies to both residential and commercial solar, and is also available under somewhat different rules to developers of utility-scale solar systems.
If passed, the legislation would represent the 3rd time the ITC has been reauthorized or expanded since it first became law in 2005. The tax credit was initially capped at $2,000, but that limit was dropped when the ITC was revised and expanded as part of the “stimulus” package at the end of 2008. The credit was also renewed in a year-end spending bill in December, 2015.
Why the Solar ITC is important
Since the passage of the original ITC, the costs to install solar panels have plummeted more than 75%, the solar industry has created more than 240,000 jobs, and states all across the country have met renewable energy and climate goals as a result of increasingly low-cost option.
Now, in 2019, the levelized cost of solar energy is cheaper than almost any other energy source, and more and more homeowners, businesses, corporations, and even city and state governments are choosing solar as the power source of the future. A long term extension of the ITC would likely bring many more such benefits to the country.
The ITC has been so successful, attempts have been made to secure a similar tax credit for energy storage and other emerging technology.
Support from 2020 Presidential Candidates
At the time of their introduction, the bills cosponsors counted among their ranks five current Democratic candidates for President, including Senators Kirsten Gillibrand (D-NY), Cory Booker (D-NJ), Amy Klobuchar (D-MN), and Kamala Harris (D-CA), and Representative Tulsi Gabbard (D-HI-2).
We also haven’t heard anything from candidates not serving in Congress, including Jay Inslee, who is running on a 100% renewable energy plaform, Julian Castro, Beto O’Rourke, or Joe Biden.
How you can get involved
If you’d like to add your voice to the support for the ITC extension, the most important thing you can do is contact your federal elected officials. Tell them you support the renewal of the Solar ITC, and that you urge them to vote for it.
If you’re social-media inclined, tweet about the extension using the hashtag #DefendTheITC, and share this article on Facebook and Twitter, too!
If you want to go solar
If you’ve been thinking about solar panels on your own home, you should know that the ITC is still set to expire after 2022, and it’s stepping down after December 31st of this year. If you pay federal taxes and have enough tax liability to claim the full 30% of costs back on next year’s taxes, there has never been a better time to go solar.
Last modified: July 29, 2019