The Federal ITC:
Updates for Homeowners Looking to Go Solar

Going solar has become a popular way for homeowners and businesses to reduce their energy costs and decrease their carbon footprint. The federal Investment Tax Credit (ITC) is a key incentive that makes going solar more financially viable for many people.The federal ITC was in the process of phasing down from 30% to 10% over 4 years, but once the Inflation Reduction Act (IRA) bill was passed, $369 billion in federal incentives have since been allocated to our national energy security and climate change programs – the largest climate investment ever by the US government. The IRA not only extends the ITC at 30%, but goes well beyond any past legislation in its support of the clean energy industry by expanding the tax credits to apply to additional technologies, like energy storage. This ITC increase applies to both business and residential projects, including those installed in 2022, and will last through the end of 2032.

Monetary Benefits for Home and Business Owners

The federal ITC is available to individuals and businesses that install solar energy systems on their property. The credit is equal to 30% of the cost of the solar energy system, including installation and equipment costs. This credit can be applied to your federal income taxes, effectively reducing the cost of going solar by a significant amount.Although the cost of solar installations has been decreasing in recent years, it can still be a significant investment. The federal ITC helps offset some of these costs, making it a more viable investment.

Solar Industry Growth

Another benefit of the federal ITC is that it supports the growth of renewable energy. By making it more financially viable for individuals and businesses to invest in solar energy, the federal ITC helps to promote the use of this clean energy source.The federal ITC also helps to create jobs in the solar industry. As more people invest in solar energy systems and tell their friends and family about the benefits, the demand for solar increases, which in turn supports local economies. (Looking for local solar done right? We’ve got you covered!)

Encouraging Energy Independence

In addition to the financial benefits, the federal ITC increases overall energy independence. Solar energy systems allow individuals and businesses to generate their own electricity, reducing their dependence on traditional energy sources from the utility grid. This can be especially beneficial for homes and businesses during power outages when paired with energy storage.

Supporting a Brighter Future

Finally, the federal investment tax credit also helps protect the environment. Solar energy systems do not produce emissions or pollution, making them a clean energy source. By investing in solar energy, individuals and businesses can play a role in mitigating the effects of climate change.The federal Investment Tax Credit (ITC) is an important incentive that makes going solar more financially viable for many people. The credit helps to offset the cost of solar installations, supports the growth of renewable energy, creates jobs, and increases energy independence while protecting the environment. If you are thinking about going solar, be sure to check with your accountant to be sure you can take advantage of the federal ITC. And when you’re ready to take the next step, get in touch with our friendly Solar Advisor team!

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