Tax season is now over, which means for our NATiVE solar customers, their systems paid back even more than their monthly energy bill savings! Let us take you through the numbers of what a 30% Investment Tax Credit provides to solar customers and installers.
The Renewable Energy Investment Tax Credit (ITC) is a dollar-for-dollar federal income tax reduction that a person or company would otherwise pay the government, based on the cost of a solar project. As of 2016, both the residential and commercial ITC are equal to 30 percent of the total amount of solar system cost, and will remain at that rate through 2019. The tax credit then tiers down to 26 percent in 2020 and 22 percent in 2021. After 2023, the residential credit will reduce to zero and the commercial credit will reduce to a permanent 10 percent. Also, if you’re considering a new roof, costs associated with “on-site preparation” for a solar installation such as re-roofing and tree trimming may be bundled together with the tax credit amount! One of the savvy benefits of going solar with NATiVE, is that we can provide all these services all under one roof.
Not only is the ITC favorable for system owners, but it also is supporting the development of the US solar industry. With the tax credit in place, we have seen the industry grow at an average annual rate of 76 percent since 2006. This has resulted in robust job creation, creating jobs at a rate approximately 20 times higher than overall employment growth in the economy. Additionally scaling up solar in the US has brought down overall installation costs of for consumers. Since 2008, the cost to install solar has dropped over 60% in Texas. The recent approval of the ITC through 2022 assures market stability and encourages companies to make long-term investments which will increase competition and innovation, further lowering costs for consumers.
That’s a lot of numbers to crunch, but the ITC makes filing your taxes a little more exciting, especially when your investment shines brightly on saving you money during every property owner’s favorite time of year!
*Please reach out to your tax professional to further consult on applying the tax credit accurately for your specific solar installation.