What is the ITC Tax Credit?
The Solar Investment Tax Credit (ITC) has provided industry stability and growth since its initial passage in 2006. In the last decade, solar has experienced an average annual growth rate of 50%. Installations surged in 2016 ahead of potential expiration of the ITC, but an extension in late 2015 has created federal policy stability through 2021. To learn more about the ITC and its impact on the solar industry.
- The ITC is a federal tax credit that allows homeowners and businesses to deduct 30% of the cost of installing solar from their federal taxes for 2019 and 26% for 2020.
- A tax credit is a dollar-for-dollar reduction in the income taxes that a person or company claiming the credit would otherwise pay the federal government. The ITC is based on the amount of investment in solar property.
- The individual or business that installs solar panels by the end of each calendar year to receive the credit. Since 2006, the credit has helped solar deployment grow by more than 10,000% and is a proven policy for spurring private investment.
- Over 242,000 Americans work in solar – more than double the number in 2012 – at more than 10,000 companies in every U.S. state.
In 2018, the solar industry generated a $17 billion investment in the American economy.
- The ITC is one of the most important federal policy mechanisms to support the deployment of solar energy in the United States. Since the multi-year extension of the credit in 2008, solar prices have consistently fallen year after year while installation rates and efficiencies have continued to climb. The continued success of the ITC demonstrates that a stable, long-term incentive can drive growth, reduce prices and create jobs in solar energy.