What is the 30% Investment Tax Credit (ITC)?
The 30% Investment Tax Credit is a federal tax credit that incentivizes taxpayers to invest in renewable energy systems in order to combat the climate crisis. Thanks to the implementation of the new Inflation Reduction Act (IRA), the ITC has increased from 26% to 30% and has been extended until 2032. The credit will then reduce back to 26% in 2033, 22% in 2034, and will be discontinued in 2035.
What renewable energy systems are covered by the ITC?
Homeowners and businesses can now claim 30% off of their year-end federal taxes and save thousands when installing a new solar power system. This credit can also be put towards wind, geothermal and, other renewable energy systems. In addition, the 30% Investment Tax Credit now includes “stand-alone” energy storage on its list of qualifying energy systems. This means customers can use this credit for installing additional backup power and storage (batteries).
Solar cost covered by the ITC:
Solar panels and additional “stand-alone” battery storage
Equipment such as wires, inverters, mounting hardware, and more
Installation labor costs
Permitting, inspection and developer fees
Sales tax on eligible expenses
Am I eligible for the 30% Solar Investment Tax Credit?
You must be a property owner that pays federal taxes to be eligible for the ITC (all tax brackets qualify). Solar systems must be purchased, installed, and operational at a primary or secondary residence within the year the credit is available. Purchases must be outright or financed with a loan in order to use this credit. Credits for panels that are leased or purchased through a Power Purchase Agreement (PPA) are collected by the developer.
Why should I use the ITC for solar?
Not only is solar the most abundant renewable energy on the planet, it is more cost effective than ever and is growing at a record pace. In the last decade, the cost of solar power has reduced by 60% with an annual growth rate of 33%. (Solar Energy Industries Association) With over 300 sunny days a year, Coloradans rely on solar as their renewable energy of choice. Sandbox Solar is proud to be a premier solar contractor in an industry leading state. We strive to provide our community with clean renewable energy at the highest quality in order to do our part.