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26 tax credit ohio solar installation

Solar Tax Credit Extension is Included in the Covid-19 Relief Bill

We are thrilled to announce the Extension of the 26% Solar Investment Tax Credit!  

The United States federal spending and tax extension package was passed by congress alongside the $900 Billion Covid Relief package last week and signed into law by the President on Sunday night. This package will bring huge relief to Americans who are struggling in the face of the pandemic. It also includes several critical extensions to the solar investment tax credit (ITC).  

What This Mean for Solar Shoppers and Customers 

The ITC dropped from 30% to 26% in January of 2020. The solar industry has been bracing for another step down in the (quickly approaching) new year. Just a few days away from the end of the year – solar shoppers who have not yet gone solar, or have not had their project installed–  have more time! 

With the Extension outlined in the stimulus bill, solar buyers will receive 26% back from their system’s full turnkey cost if installed before the end of 2022. So, solar projects constructed in 2020, 2021, or 2022 are now eligible for the full 26% ITC.  

Solar projects constructed in 2023 will be eligible for a 22% tax credits. After 2023, there will be no tax credit for residential solar installations. Commercial-scale solar projects will be eligible for a 10% tax credit from 2024 onwards.  

Tax Credit Law – Locations  

  • Original code for residential solar properties can be found in Title 26 Section 25D of the U.S. Tax Code
  • Original code for commercial solar projects can be found under Title 26, section 48 
  • Extension language for residential solar can be found in the relief bill on page 4915 
  • Extension language for commercial solar can be found in the relief bill on page 4908  

Clean Energy Growth 

We are excited by the inclusion of so many renewable energies in the bill. The inclusion of solar energy and so many clean energy alternatives in this bill will certainly spur tremendous growth and clean energy investment for years to come.  

The solar tax credit has been the most significant stimulus for residential and commercial solar that the industry has seen. According to the Solar Energy Industries Association, since its implementation in 2006, the residential and commercial solar tax credit has helped the U.S. solar industry grow by more than 10,000 percent, with an average annual growth of 50% over the last decade alone.  

We expect to see solar industry professions keep their stance at the top of lists predicting job growth in the years to come. This Extension will undoubtedly help us deploy more solar energy more quickly across homes and businesses across the state of Ohio and beyond. Third Sun Solar and our partners across the country are excited to continue to deploy solar energy and supply a means of gainful employment to our communities in these times of economic hardship.  

 

To find out more about the Solar Investment Tax Credit, the Extension, and what it all means for your solar project, get in touch!  

 

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Sunset behind home with new solar array

Solar Tax Credit Sunset

Solar in Ohio

2020 has been quite the unexpected year. And, believe it or not, the end of 2020 is quickly approaching. As we enter the last quarter of the year, we want to remind you that 2020 is the last year to claim the 26% federal tax credit. While the change from the 26% to the 22% in 2021 federal tax credit sure seems like a big drop, the federal tax credit for solar will sunset and drop down to ZERO in 2022. And that’s a really… big… drop.

There are a few points of confusion that we hear a lot from those curious about solar right now. We truly believe the time to act is now in Ohio if you’re:

  • Considering making an investment in your property by adding solar
  • If you’re planning on expanding your solar array to accommodate increased energy needs in this “new normal” & we’re all at home a little more.

If you fall into either category, keep reading to find answers to those solar questions.

Solar Investment Tax Credit

  1. The step down – The biggest incentive out there today, the Solar Tax Credit decreased from 30% to 26% in 2020. It will step down just once more to 22% in 2021 before dropping to 0% permanently for residential solar installations.
  2. Getting the timing right – If the price you are quoted includes the 26% federal tax credit, that means that the system will need to be physically installed this year for you to take that tax credit.
  3. Adding Batteries and/or Expanding – solar battery storage and expansion solar systems are eligible for the tax credit. The advancements in technology and the availability of batteries in Ohio make adding battery storage enticing to homeowners. Tesla Powerwall batteries are the #1 choice with many of our current customers, though Third Sun offers various battery options.
  4. Auxiliary Costs + Claims – The current tax code allows for the cost of system expansion, but not the cost of routine maintenance. De-installing and re-installing solar for a re-roofing project are ineligible costs for the Federal Tax Credit. Additionally, the –re-roof itself is also ineligible for this tax credit.

Preparing for Solar in 2021

2021 is the final year of the Solar Investment Tax Credit. In Ohio, we are anticipating a very busy 2021. If you know that this year is too soon for solar, start making plans for next year. Do you know if you’re eligible to take the solar tax credit? If not, find out! Talk with your tax professional to see if there is a way for you to structure your taxes to take the 22% solar tax credit. The Solar Investment Tax Credit is the largest solar incentive we’ve seen in Ohio. And we know lots of Ohioans won’t want to leave that on the table.

Simple supply and demand tells us that the solar market will be in a frenzy next year. Between equipment availability and installation capacity – we are planning for a busy year.

If you already have a 2021 solar installation in mind, we recommend reaching out to start your process now. We anticipate a large rush and installation wait times to go up as we move into 2021.

As you make the important decision to go solar, remember to consider the quality, ethics & longevity of your solar partner. Choose an installer you trust.

  • Get A Solar Evaluation