The Solar Investment Tax Credit (ITC) is a federal tax credit to incentivize solar projects for commercial businesses. Since the ITC began in 2006, the solar industry has grown by 10,000%. Even with the extensive growth, solar only represents 2.5% of the energy production across the country.
The ITC was at 30% through 2019 and dropped to 26% in 2020. In 2021 it was scheduled to drop to 22%, however, it has been extended. Alongside a Covid Stimulus bill in which Congress passed a $1.4 trillion spending package, the ITC was extended at 26% through 2022. After 2022, the ITC will drop to 22%, then to 10% in 2023. Although many states offer incentives, more often than not, the ITC offers the most valuable monetary incentive.
The recent bill also provides billions of dollars in research and development for renewable energy such as wind and solar power. The new funds for clean energy are being called “the energy act of 2020”, and will provide $1.5 billion dollars for solar research. The goal of the energy act of 2020 is to lead to more job creation, increase energy independence, and guarantee the US to continue to be the world leader in green energy.