The federal solar tax credit is an incentive that grants a credit worth 30% of the qualified costs associated with the installation of a PV solar system. The non-refundable credit is applied to your federal taxes and was enacted as part of the Energy Policy Act of 2005 in order to spark interest in the US renewable energy market.
Homeowners and businesses alike are able to claim the credit. The total value of the tax credit can currently be calculated by taking 30% of the solar system cost – and there is no limit to the value of the credit.
While the solar tax credit has made solar significantly more affordable, it will begin to decline in 2020. In 2022, the credit will disappear completely for residential systems and will permanently drop to 10% for commercial systems. We’ll show you your total potential savings with the credit, what’s expected to change, and how these changes will impact the solar industry as a whole.
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Solarman says
From the article, it still shows the price per installed watt of Solar PV still continues to drop off after the ITC is zeroed out for residential installations. There is now lobbying for a continuation of the ITC at a 25% rate “from now on”, to renewing the ITC and ramping it down again some time around 2030. Either way, it was supposed to stop in 2016 and was again extended. Politically we don’t know for sure what the future brings. The ITC may be extended to the 25% rate including solar PV AND behind the meter energy storage. Bi-facial solar PV panels are being ramped up by manufacturers. More power production from the same square feet of panel space, less panels needed, energy storage allowing the resident to use the energy storage for electricity arbitrage, reducing home energy costs even more.