As if going solar didn’t have enough benefits (lowering utility bills and protecting the environment to name a few), solar owners qualify for rebates and incentives that help lower the cost of installing solar panels. These discounts on your solar system make it even more affordable to go solar.

No need to worry about filling out complicated forms. As part of our solar services, we will take care of the utility rebate paperwork and enroll you in the net metering program.

Residential Solar Electric Rebates

Federal Tax Credit: Solar Investment Tax Credit (ITC)

The solar Investment Tax Credit (ITC) is one of the most important federal policy mechanisms to support the growth of solar energy in the United States. Since the ITC was enacted in 2006, the U.S. solar industry has grown by more than 10,000% – creating hundreds of thousands of jobs and investing billions of dollars in the U.S. economy in the process.

  • The ITC is a 26 percent tax credit for solar systems on residential (under Section 25D) and commercial (under Section 48) properties. The Section 48 commercial credit can be applied to both customer-sited commercial solar systems and large-scale utility solar farms. 
  • The residential and commercial solar ITC has helped the U.S. solar industry grow by more than 10,000% percent since it was implemented in 2006, with an average annual growth of 50% over the last decade alone.
  • Congress passed a two-year delay of the ITC phasedown in 2020
  • Eligibility for the Section 48 ITC is based on a “commence construction” standard. The IRS issued guidance in June 2018 that explains the requirements taxpayers must meet to establish that construction of a solar facility has begun for purposes of claiming the ITC. Note that this guidance applies to residential and commercial solar projects differently.
Solar ITC Schedule

How Does the Solar Investment Tax Credit Work?

The Investment Tax Credit (ITC) is currently a 26 percent federal tax credit claimed against the tax liability of residential (under Section 25D) and commercial and utility (under Section 48) investors in solar energy property. The Section 25D residential ITC allows the homeowner to apply the credit to his/her personal income taxes. This credit is used when homeowners purchase solar systems and have them installed on their homes. In the case of the Section 48 credit, the business that installs, develops and/or finances the project claims the credit.

A tax credit is a dollar-for-dollar reduction in the income taxes that a person or company would otherwise pay the federal government. The ITC is based on the amount of investment in solar property. Both the residential and commercial ITC are equal to 26 percent of the basis that is invested in eligible solar property. The ITC then steps down according to the following schedule:

  • 26 percent for projects that begin construction in 2021 and 2022
  • 22 percent for projects that begin construction in 2023
  • After 2023, the residential credit drops to zero while the commercial credit drops to a permanent 10 percent

Commercial and utility-scale projects which have commenced construction before December 31, 2023 may still qualify for the 26 or 22 percent ITC if they are placed in service before January 1, 2026.

Want to learn more on how much you can benefit by going Solar?

Contact us today, and one of our Solar experts will get in touch and help you with all your Solar related questions.

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