26% SOLAR TAX CREDIT EXTENDED 2 YEARS!
Extended renewable energy tax credits have been included in a $1.4 trillion federal spending package alongside a $900 billion COVID-19 virus relief spending bill. The solar investment tax credit (ITC), which was scheduled to drop from 26% to 22% in 2021, will stay at 26% for two more years.
This means that solar projects in commercial, industrial, utility-scale — that begin construction in 2021 and 2022 will still be able to receive a tax credit at 26%. Residencial solar projects completed in 2021 and 2022 will receive the 26% tax credit. All markets will drop to a 22% tax credit in 2023, and the residential market will drop to 0% in 2024 while the commercial and utility markets will sit at a permanent 10% credit.
The only slight disappointment is that energy storage/batteries were excluded and decline to 22% at year-end although I have a suspicion that this might get corrected early in 2021.
For our environment, for our Kentucky, Indiana and Ohio customers, for our team members and for job growth in the clean energy industry as a whole this 11th hour 59th minute surprise that was passed and signed as of late Sunday December 27th, is nothing short of a miracle.
With continuing net metering fights in Kentucky, and a 2022 net metering cliff (to retain full retail rate until 2032) and increasingly full utility net metering allocations in Indiana there is every reason to move quickly to solar while this 26% tax credit support lasts.