If you’ve considered installing a solar system to fuel energy for your business or home, now is the time. The solar ITC is still in effect today, but there’s limited time left before it expires. O3 Energy is here to explain the credit.
What Is The Solar ITC?
The federal solar tax credit, better known as the investment tax credit (ITC), allows home and business owners to deduct 26% of the cost of installing a solar system from federal taxes. The credit can be applied to residential and commercial systems, and thanks to this significant tax break, the average solar panel buyer saves thousands of dollars.
A Growing Industry
Solar installation costs are declining, with construction costs dropping by 37% from 2013 to 2017. Due to this tremendous drop in installation costs, homeowners and businesses are flocking to their local solar panel experts and implementing systems. The market expects to rise even more in 2021, with over 96% of net new energy generation coming from solar and wind sources.
Thanks to the solar ITC and lower installation costs, the use of solar for commercial and residential owners to run their operations is growing rapidly, especially in Texas, with a capacity of about 4,606.20 megawatts (MW). But Texas isn’t the only state going solar. The US installed 3.5 gigawatts (GW) of solar power at the beginning of 2020, which is enough power to fuel 16.1 million homes. Research shows that the solar industry isn’t slowing down anytime soon. The US market is expected to install nearly 100 GW of solar power from 2021-2025, which is more than what was installed over the past five years.
The Solar ITC Extension
The federal ITC was established by the Energy Policy Act of 2005. It was originally set to expire at the end of 2007, but a series of extensions pushed the date back to the end of 2016. Solar experts believed that the additional five-year extension would season the industry, bringing it to full maturity. The spending bill that Congress passed in 2015 means that the ITC is available through 2021.
The Solar ITC Phase-Out
The solar ITC began phasing out earlier this year and is expected to end in 2022 when the credit drops to zero for residential projects and 10% for commercial projects.
Here’s a timeline of significant solar ITC dates:
- 2016-2019: The credit remained at 30% of the system’s cost, giving solar panel purchasers a considerable discount off the price of solar power.
- 2020: Residential and commercial solar system owners deduct 26% of the cost of the solar system from their taxes.
- 2021: The deduction is expected to drop to 22% for residential and commercial solar system owners.
- 2022: The deduction amount is expected to decrease to 10% for commercial solar system owners, and residential system owners will no longer be eligible for a federal tax credit.
Solar ITC Benefits Commercial and Residential Owners
Many of our residential and commercial customers benefit from the solar tax credit. They pay fewer taxes on their system and have considerably lower utility bills every month, resulting in cost savings and maximum ROI.
O3 Energy can help you get started on implementing a solar system into your home or business. We begin by performing an energy audit to give you a precise prediction of your project costs. Then, we analyze how soon you can expect your ROI. Many of our customers see cost savings within the first few months after installation. The initial installation costs are at an all-time low, so there’s no better time to harness the power of solar. It’s crucial to consider solar now before the federal tax credit expires in 2022.
Choose O3 Energy and Benefit From Solar ITC Today
Solar panel systems benefit a wide range of individuals and businesses, such as car dealerships, gas stations, and hotels. From the average homeowner to the business owner, customers benefit from reduced, predictable monthly bills.
We know that clean energy powered by solar is the energy source of the future. That’s why it’s our goal to provide homeowners and businesses with energy generation capitalizing on this revolutionary system. Not only does solar energy save you money, but it’s a more sustainable resource for the environment. And when you choose O3 as your solar panel supplier, you get the freedom to control your energy needs. Contact us today to learn more about how you can benefit from the solar ITC 2021.
