As part of a deal between Congressional Democrats, Republicans and the White House, a $900 billion spending bill was passed through both houses of Congress on Monday that includes– among many things– an extension of the Federal Solar Investment Tax Credit. This bill is not part of the $1.4 trillion coronavirus relief package.
Speaker of the House Nancy Pelosi and Minority Leader Chuck Shumer released a joint summary of the spending bill that includes “sweeping clean energy reforms, R&D enhancements, efficiency incentives, and extends clean energy tax credits to create hundreds of thousands of jobs across the clean economy.”
The federal income tax credit started at 30% of the total cost of a residential solar system and was set to step down from 26% to 22% at the end of this year, and expire entirely at the end of 2021. Under this bill, homeowners would have two more years to take advantage of the 26% tax credit value.
If approved by the White House, the tax credit will remain at 26 percent through the end of 2022 before dropping to 22 percent in 2023.
That’s good news for homeowners considering going solar because it allows them to claim a higher percentage of their total cost on their income taxes and ultimately lowers the investment of solar energy.
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