The solar Investment Tax Credit (ITC) is one of the most important federal policy mechanisms in support of renewable energy in the United States.

The Investment Tax Credit is a federal tax credit for solar systems on residential and commercial properties that Congress has agreed to extend at the current 30-percent rate through 2019, after which it will fall to 26 percent in 2020, 22 percent in 2021 and 10 percent in 2022.  An additional commence-construction clause will extend the credit to any project in development before 2024.

A tax credit is a dollar-for-dollar reduction in the income taxes that a person or company claiming the credit would otherwise pay the federal government. The ITC is based on the amount of investment in the solar property.  Both commercial and residential ITC are credits equal to 30 percent of the basis that is invested in eligible property placed in service before December 31, 2019.  After that date the ITC is reduced yearly eventually dropping to 0 for residential and 10% for commercial in 2022.

The Baker Energy Team will work with you to locate all credits and incentives your system qualifies for.

Key Dates & Information

Solar-electric property

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2021
  • 22% for systems placed in service after 12/31/2020 and before 01/01/2022
  • There is no maximum credit for systems placed in service after 2008.
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2021.
  • The home served by the system does not have to be the taxpayer’s principal residence.

Solar water-heating property

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2021
  • 22% for systems placed in service after 12/31/2020 and before 01/01/2022
  • There is no maximum credit for systems placed in service after 2008.
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2021.
  • Equipment must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed.
  • At least half the energy used to heat the dwelling’s water must be from solar in order for the solar water-heating property expenditures to be eligible.
  • The tax credit does not apply to solar water-heating property for swimming pools or hot tubs.
  • The home served by the system does not have to be the taxpayer’s principal residence.

Click here for additional state by state incentives

TAX CREDITS, REBATES & SAVINGS