The federal solar tax credit, known as the ITC (Investment Tax Credit), was initially established by the “Energy Policy Act of 2005.” This gave homeowners across the country the opportunity to invest in an energy-saving solar system and get a federal tax credit of 30% of the purchase price. The credit was needed due to the high cost of solar equipment, specifically, solar photovoltaic panels. With other incentives available to manufacturers, cheaper raw materials, and competition, the price of photovoltaic panels has decreased in the past decade. These lower prices have lessened the need for subsidies. For example, we (Excel Solar) were selling photovoltaic systems (solar electric) for about $10 per watt just fifteen years ago. However, today, our price is near $3 per watt, installed!
Now, the federal solar tax credit is being phased out. 2019 was the last year for the 30% tax credit. This year, 2020, the credit is reduced to 26% and, in 2021, the credit will be reduced again to 22%. This will be the end of the residential tax credit. By 2022, a 10% federal tax credit will continue for commercial buildings only.
There is still plenty of time for homeowners to take advantage of this government program. However, they should start shopping now. Of course, Excel Solar offers free, no-hassle estimates for all your solar needs. Maybe it’s finally time to take control of your FPL bill?
Please review Instructions for Form 5695 to learn more.
C. Russell Moutsatsos
President of Excel Solar, Inc.
State Certified Solar Contractor (License #CVC56933)