With 2019 coming to a close in just a few weeks, here are few tips for maximizing this lucrative investment before it’s gone and what to expect when 2020 arrives.
Indeed, the solar energy industry is burdened with deadlines. From utility rate changes to diminishing incentives – we work hard to keep our customers informed of the evolving landscape so that they can make informed decisions and benefit from grandfathering clauses that allow them to lock-into today’s best programs before they're gone.
With that in mind, here are the four most critical things you need to know about the pending ITC drop and what you should consider if you're still on the fence about going solar in 2019.
1. Congress could extend the 30%, but we’ll likely not know for a while
A five-year extension if the ITC is detailed in 2289, the Renewable Energy Extension Act, which was brought forth by Catherine Cortez Masto of Nevada in July 2019. The solar industry has been lobbying aggressively for the passage of this bill and while signs look positive, many industry experts have placed the odds of passage between 25-30 percent. With Congress largely distracted as we close out 2019, it’s a relatively safe bet that any decision on this issue will likely be last minute or even pushed to early 2020.
2. A 26% tax credit is still substantial
If an extension is not approved, the ITC will drop to 26% on January 1, 2020. While the loss of 4% is certainly noticeable, 26% still offers substantial savings potential. With that said, if you’ve been considering solar, there’s still time to leverage the full 30% credit through our special promotion described in #1 above. An assessment costs nothing and even if you opt to wait, at least you’ve vetted the options while the tax credit is still at its peak.
3. What does and doesn’t qualify for the solar tax credit
We always recommend that you consult a tax accountant for advice when preparing your taxes, but in the broadest strokes, here’s what qualifies for the ITC. This is a summary of the major criteria sourced from a recent article published in Consumer Reports. Consult an accountant for more comprehensive details.
- The entire purchase price for the system, minus sales tax. This includes panels, inverter, demand manager, battery, racking and wiring, as well as labor costs for all on-site preparation and installation.
- System must be purchased or financed. Leases do not qualify.
- The system must be installed on a residence that you live in for at least part of the year. Under certain circumstances, this could include a home that you rent out part of the year. The credit is pro-rated based on how much time you spend in it. Consult a tax accountant for details.
- Leased systems do not qualify. In the case of leases, the company that leases it to you retains the incentive.
- Solar installed on an income property where you don’t maintain at least partial residence does not qualify.
- Systems used exclusively to heat swimming pools hot tubs or hot water heaters do not qualify.
If you're looking to go solar, now is the time to act. With the 26% solar tax credit decreasing again at the end of this year, going solar now will ensure the biggest and fastest return on your solar investment.