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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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Home with REC Solar Panels in Avon Ohio

Invest at Home: How to Maximize Savings with the Solar Tax Credit  

Timing is everything when you’re thinking of purchasing a solar system for your home. It may sound like a great marketing pitch but, hey, it’s true. If you want to get the most savings on your solar install… now is the time to start exploring your options. The biggest incentive out there today, the Solar Tax Credit, or Investment 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 (a 10% solar tax credit will remain for commercial solar systems).  

Solar Tax Credit – How does it work? 

The solar tax credit is applied to your federal income taxes as a credit, and it reduces (or eliminates) what you owe. It’s not a refund or a deduction. Anyone who purchases a solar installation on their home or business is eligible to claim the tax credit. However, you must have a tax liability to claim the credit. You can claim the credit over more than one year. In doing this you carry any leftover amount forward into the next year.  

If you have any questions or need more clarity, our Solar Consultants are ready to chat with you about the solar tax credit. As you likely assumed, we are not tax experts, so we will ask you to reach out to your tax professional for any questions related to your specific tax liability.  

Too early? Think again! 

To claim the 26% tax credit, you must act quickly as our end of the year queue is filling up! If you purchase a residential solar system in 2020 and it is installed in 2021, you would only be eligible to take that year’s tax credit (22%). So, your system needs to be installed in 2020 to be eligible to claim the full 26%. (Heads up for business owners: the rules are slightly different here for commercial projects).  

Ohio Incentives & Additional Offers? 

Unfortunately, there are no statewide or local solar incentives available in Ohio. Loan options vary from solar company to company. Various finance partners have different programs and different rates (and different hidden fees baked into the price). Most solar installers in Ohio offer $0 down loans. Like them, we can offer you zero money down with any of our term loans. This is a great option for those that want to go solar but don’t want to tap into home equity or savings. 

 

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