The 26% Federal Investment Tax Credit for going solar was extended on December 27, 2020 to last until 2023. Previously, the ITC was scheduled to drop from 26% to 22% on January 1, 2021 and then drop to 0% for residential systems in 2022. This extension, rolled into the massive $2.3 trillion COVID-19 relief and government spending bill, is a relief to future solar customers and solar installers.
In addition to this, energy storage was also highlighted in this bill. The Better Energy Storage Technology (BEST) Act allows for $1 Billion of federal investments over five years into energy storage.
This clean energy package included in the omnibus bill is being broadly praised by the renewable energy sector. According to the Solar Energy Industries Association, the residential and commercial solar ITC has helped the U.S. solar industry grow by more than 10,000% since coming into law in 2006. In the last decade alone, the average annual growth of solar energy increased over 50%.
This boom in solar energy directly relates to job growth and stimulation of the local economy. The Federal ITC has allowed solar to become financially accessible to the public, and it encourages local economies to invest in renewable energy independence through solar. With more people working in the solar industry than coal, this extension is a reflection of the United States’ shift towards cleaner energy industries.
Not sure how the Solar Investment Tax Credit works? Read more about the Solar ITC here.
