Although the Investment Tax Credit for solar power, or ITC, is dropping after 2019, Solaron of Sacramento is happy to report that it is not going away! Starting in 2020, you can still take 26% of the cost of installing your solar electrical system directly off your tax obligation for that year. If need be, this tax credit can be spread over an additional year, making photovoltaic power a very useful investment for tax purposes.
What Happens to the ITC in 2021?
If you missed out on the larger tax credit in 2019, it is very important not to procrastinate in 2020. The ITC declines even further for 2021, going down to 22% of the total solar system cost, an 8% reduction compared to 2019. But even more alarming for residential customers is what happens to the solar tax credit in 2022. In that year, the tax credit for homeowners disappears completely!
The ITC After 2021
Although the credit will continue into the future as a permanent 10% deduction for businesses installing solar power, its elimination for the residential community is a severe blow that we expect to strongly drive photovoltaic purchases in 2021. Therefore, waiting very far past the summer of 2021 to sign a contract with Solaron to install your solar panels may mean that the job is not finished in time for you to qualify for the credit, chiefly due to very high demand. Also, the 2021 tax year may be the last opportunity for homeowners to claim the credit. In other words, it is not guaranteed that the tax credit can be split between tax years and carried over after the April tax deadline of 2022. Therefore, acting in 2020 may be your best opportunity to maximize the tax savings of the ITC.
As always, you should discuss tax matters with a certified tax consultant. And to put your house or business in line for the installation of a money-saving solar system, talk to the experts at Solaron, bringing solar for life to Sacramento and Northern California.