We all complain sometimes about how nothing seems to get done in Washington. But for homeowners considering residential solar panels, the federal government provided an early December present – a renewal of the federal investment tax credit (ITC) for solar, that will last through the year 2022.
This is great news for anyone looking to start saving money with clean energy delivered via sunlight, as this tax credit makes it even easier and more affordable to invest in solar energy.
The ITC will remain at its current level of 30% through 2019. It will then drop to 26% in 2020 and down to 22% in 2021. That means if you purchase residential solar panels this year, you can subtract 30% off the net cost from your income tax bill.
Why Did it Happen?
Not that any of us want to question good news, but this was an incentive that was always meant to be temporary, and that many experts thought would be expired by now.
The reprieve may be attributable to an ongoing recognition of the importance of clean energy, which was reinforced at the Paris climate talks on December 12. The United States delivered a strong commitment to green policies and renewable energy sources, and both parties in Congress managed to work together on a budget deal that included an extension of the solar investment tax credit.
There is No Better Time to Buy
For the solar industry, the timing of this extension could not be better. The year 2015 saw more homeowners and homebuyers make the solar switch than ever before, and that momentum shows all signs of carrying over into 2016 and beyond.
With the price of solar panels already having declined over the previous decade, as well as the availability of other money-saving incentives through the California Solar Initiative Program, 2016 is a great time to consider turning your home into a solar home.