In an effort to grow the solar industry and increase sustainability, the Federal Solar Investment Tax Credit (ITC) was enacted in 2006. Over the years, this tax credit has created hundreds of thousands of jobs and made installing solar panels affordable for both home and commercial property owners. Congress passed a 2-year delay of the phasedown of the credit, which was originally set to take place in 2020. Now, home and business owners have all of 2022 to take advantage of the 26% tax credit!
Below is a breakdown of the ITC schedule over the next couple of years:
- 2022: Solar energy projects that begin construction in 2022 are eligible for a 26% tax credit.
- 2023: Solar energy projects that begin construction in 2023 are eligible for a 22% tax credit.
- 2024 and beyond: Residential solar energy projects that begin construction after 2023 will no longer be eligible for a tax credit. Commercial projects will only be eligible for a 10% tax credit.
The ITC allows you to deduct up to 26% of the cost of your solar energy system from your federal taxes. This solar panel tax credit can then be used towards the money you owe in federal taxes.