The U.S. is poised to resume a leading role in developing and deploying the clean-energy innovations needed to eliminate greenhouse gases. Taking a step further in this way, Congress passed a legislative package on Monday combining a $900 billion COVID-19 relief package and an omnibus spending bill for 2021. The legislation provides a two-year extension of the solar Investment Tax Credit (ITC) and additional funding for research and development for renewable energy projects.
The solar investment tax credit (ITC), which was scheduled to drop from 26% to 22% in 2021, will stay at 26% for two more years. This means the solar ITC will remain at 26% for projects that begin construction in 2021 and 2022. The Federal Tax Credit will step down to 22% in 2023 and then drop to 10% in 2024 for commercial projects, whereas the residential credit ends completely. Hence, if you are thinking about going solar or have already started the process, you will still receive the 26% credit next year!
The legislation also includes The Better Energy Storage Technology (BEST) Act authorizes over $1 billion over five years for federal investments into energy storage R&D. Targets include multi-hour-duration distributed batteries and control systems to manage their interaction with the grid.
More than $2 million over a period of five years will be awarded for grid modernization which includes integration of renewables, batteries, and electric vehicles to model grid architectures and others.
A two-year extension is “a much better outcome than the industry had expected,” said Ravi Manghani, head of solar research for Wood Mackenzie. Indeed, the extension of the federal tax credit will allow us to deploy our technology at a faster rate and bring good jobs for Americans. Without any doubt, Solar ITC has been one of the most effective pieces of climate legislation in effect since its inception.
We are delighted to share this great news with you, and we look forward to helping you save money and save the planet- in 2021 and beyond!
Taking advantage of the ITC is easy! Simply make a call to our Staten team at 408-780-2889 and we will walk you through it.
We wish you a Merry Christmas and a Happy New Year!
