Why do the majority of consumers choose to go solar? There are several environmental, home improvement, comfortability, and aesthetic reasons why residents decide to install solar on their home, business, or non-profit. However, one of the most significant reasons people make this investment is because of the vast financial and energy saving benefits. One of the most important federal incentives of deploying solar energy is the ITC.
What Is The ITC?
The ITC is the Federal Solar Investment Tax Credit and is one of the most important financial incentives for going solar. According to the Solar Energy Industries Association (SEIA),
The Investment Tax Credit (ITC) is currently a 30 percent federal tax credit claimed against the tax liability of residential (IRC Section 25D) and commercial and utility (IRC Section 48) investors in solar energy property. The Section 25D residential ITC allows the homeowner to apply the credit to his/her personal income taxes. This credit is used when homeowners purchase solar systems outright and have them installed on their homes. In the case of the Section 48 credit, the business that installs, develops and/or finances the project claims the credit.
Put simply, the purchase of a solar system for homes or businesses can mean a 30% tax credit for the owner(s) of the system. Not only do California residents have the opportunity to save on their monthly energy bill, but they also have the opportunity to receive a 30% reduction on the cost of their solar project.
Will There Always Be an ITC?
This past year, the ITC for solar was going to disappear. However, Congress has decided to extend the ITC for a limited time. The 30% credit will remain until 2019 and then begins to step down. In 2020 it will decrease to 26%, in 2021 to 22%, and after 2023 the residential credit will be removed while the commercial and utility credit will drop permanently to 10%.
Ultimately, if a home or business owner is interested in solar, it is best to quickly take advantage of this federal tax credit. There is always a possibility of policy changes on the federal level, which could affect the benefit of the solar investment tax credit.
How Do I Receive the ITC for the 2016 Tax Year?
If consumers are interested in going solar and want to take advantage of the ITC for the 2016 tax year, now is the time to choose a solar contractor! In order to qualify for the ITC in 2016, residential clients must have their solar installed by December 31, 2016.
At Green Convergence, we want to make sure you are installed by year-end. If you are thinking about going solar for your home or business, sign with us by October 22, 2016 so we can begin scheduling you for your solar installation. We expect that clients beginning their solar project by October 22, 2016 have the opportunity to receive their 30% ITC for the 2016 tax year. (NOTE: Please consult with your tax adviser or accountant to see if you qualify for the 30% ITC in 2016).
Do You Have Any Discounts?
Green Convergence wants to help you go solar quickly so you can take advantage of the ITC for 2016. If you schedule an appointment with us in our Valencia or Calabasas Solar Design Center and sign with us by October 22, 2016, we will provide you with a $1,000 discount off your system! Just click on the “Get Started” button or fill out the form below to get the process started today. There is limited time left to take advantage of the Federal Solar Investment Tax Credit for 2016! Call us today!