A coalition including Solar United Neighbors, GRID, Green Latinos, Hispanic Federation and Earthjustice sent a letter to Sen. Ron Wyden (D-OR) and Rep. Richard Neal (D-MA) asking them to allow for immediate low- and moderate-income participation in the ITC refundability provisions in the final version of the Build Back Better Act.
The group acknowledges that while refundability language for the Investment Tax Credit (ITC) Section 25D residential renewable energy credit was included in the most recent versions of the Build Back Better Act, the language does not allow for LMI families to participate in clean energy until 2024.
“While we applaud the positive steps taken on including refundability for the Section 25D residential renewable energy tax credit, we strongly urge your Committees to not put LMI households at a public health, safety and environmental disadvantage,” the groups write in the letter.
The House is expected to vote on the Build Back Better Act on Nov. 5.
Sen. Jon Ossoff (D-GA) introduced a separate bill addressing this issue called the Clean Energy for All Homes Act, which would speed up the timeline that the refundability goes into effect by one year.
Updated with Sen. Ossoff’s bill at 10:48 a.m. ET
There are ‘other’ considerations in the ITC. Unless it is specifically stated in the law, the ITC may cutoff LMI folks in the amount of the ITC to be credited to their Federal taxes. There may be many people who have Federal tax liabilities in the LMI community, but get sold on a solar PV system that costs $25K, but their Federal tax burden for that year (COVID-19) isolation leaves them with a tax burden of less than the 26% ITC allowed. These LMI folks get shorted and their installation costs more than the 26% ITC implies. Then there’s the “primary” residence requirement. IF you still own your original home and buy a second home or are planning to sell one home and move into the other, (before double mortgages) destroys your monthly income, you will find the ITC not available to you on the new home as it is NOT considered a primary residence. One way to possibly make this work is to cap the yearly tax deduction and spread the ITC of 26% over more than one year. Just sayin’.