Feds Extend Investment Tax Credit (ITC)
Omnibus Spending and COVID Relief Bill Passes
The U.S. solar industry got welcome news in late December, 2020, when the federal solar investment tax credit (ITC) was extended. The ITC was initially going to be reduced a second time on schedule at the end of 2020. The extension will provide an extra incentive for going solar until 2023. Solar buyers now have another useful incentive which makes a solar energy system investment even more financially feasible.
Solar Projects are one of the most economically rewarding energy projects. This is partly because of the savings you will incur from the solar energy production at your facility. But as the new extension proves, these are supported by the federal government through incentives, adding even more savings.
Omnibus Spending and COVID Relief Bill Passes
Late in 2020, the $US2.4 trillion spending bill and COVID stimulus package passed the U.S. House and Senate. Days before the year’s end, the president signed the bill into law. The stimulus included the vital and overdue changes to a range of clean energy incentives.
2021
The extended ITC maintains the 2020 level of credit, at 26% of the total investment cost. This will be a net gain of 4% over the earlier schedule.
2022 & 2023
The extended ITC continues the level of credit at 26% of the total investment cost. This will be a significant gain over the previous schedule which drastically decreased the credit to 10% in that same period.
ITC and Commercial Solar Power
The growing pressure during this pandemic to reduce costs in every facet of operations reinforces the value of solar energy. Particularly in Massachusetts, escalating electricity costs and leading state clean energy incentives added to federal tax credits make a solar investment pay off quickly. Some investments have been recovered in less than 4 years. That leaves upwards of a quarter of a century of maximum, continued savings AFTER the expense is recovered.
More than just a wise financial investment, solar power is one of the fastest ways for a company to improve its environmental footprint. And that in turn gives bragging rights and a boost to brand reputation, especially in areas where climate and sustainability are seen as priorities.
Buying Solar Power for Your Business
For 2020 and moving forward, there are a number of flexible buying options. Combined with the existing incentives, there has never been a better time for small business to invest to find their own immediate but long-term savings.
Most companies will find that a cash purchase, a loan through a preferred vendor, or a Power Purchase Agreement (PPA) will be their options to maximize savings and fit their budget.
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