Common Questions and Answers

The solar investment tax credit (ITC) is a tax credit that can be claimed on federal corporate income taxes for 30% of the cost of a solar photovoltaic (PV) system that is placed in service during the tax year.

At the federal level, you’ll qualify for the federal solar Investment Tax Credit (ITC). In 2022, the ITC will provide a 30% tax credit on your solar panel installation costs, provided that your taxable income is greater than the credit itself.

In December 2020, Congress passed an extension of the ITC, which provides a 30% tax credit for systems installed in 2020-2022, and 22% for systems installed in 2023. (Systems installed before December 31, 2019, were eligible for a 30% tax credit.) The tax credit expires starting in 2024 unless Congress renews it.

Five years.

You can only claim the solar tax credit one time for your solar power installation. If you have any unused amount remaining on your tax credit that you are unable to claim in a single tax year, you may be able to carry over that tax credit value for up to five years.

Currently, the federal tax credit is set at 30% of the net cost of the system for eligible homeowners if their solar system is installed by December 31, 2022. However, your clients may be able to apply the leftover amount as a carry-over into the next tax year.

Federal, state, and local governments offer rebates and incentives to encourage businesses to invest in renewable energy. These incentives can reduce the upfront costs of solar installations and provide long-term financial and environmental benefits.

• Solar is the cheapest source of electricity
• Reduces property operating expenses and can increase property net operating income (NOI)
• Meets corporate investment rate of return thresholds
• Meets ESG, sustainability, and carbon reduction initiatives
• Provides valuable avoided tax benefits with the federal tax credit and acceleerated depreciation