The ITC, Solar Investment Tax Credit, is very important to the U.S. solar industry and has helped it grow significantly. It is THE federal policy mechanism in the solar sector. The growth of the solar industry has had a positive impact on the American economy and has created hundreds of thousands of jobs. Nevertheless, the ITC will be reduced in the near future – although the positive figures speak for themselves.
Solar Investment Tax Credit (ITC)
Solar Investment Tax Credit (ITC) is going down
Solar tax benefits
If you install solar on your roof – as an individual person or company – you get tax credits. This means that the amount that would actually be paid as income tax to the federal government is reduced. Currently, the ITC is a tax credit of 26 percent for a solar system (on residential under Section 25D and on commercial properties under Section 48). Due to this solar ITC, the U.S. solar industry has grown over 10,000 per cent since its introduction in 2006.
Tax advantage that promotes renewables energies
With the turn of the year, however, changes are on the agenda: The previous 26 percent will decrease by 4 percent to 22 percent in 2023. In 2024, the tax credit will be discontinued. Solar ITS has supported the United States in approaching green energy and renewable energies. Nevertheless, solar energy accounts for only 2.7 % of energy production in the United States so far. Reducing the tax advantages now seems to be a step in the wrong direction.
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