Solar power has become a popular alternative energy source due to how ineffably green and affordable it is. Many people are looking to be environmentally conscious and money conscious. The environmental benefits of solar are obvious. There is less dependency, more renewability, and long-term sustainability. But it begs the questions, how does solar put money back into your wallet?
Well in 2005, The Energy Policy Act established the investment tax credit or ITC. The ITC is a 30% federal tax credit that you may claim for solar systems, both in residential and commercial spheres. Essentially a company setting up solar systems, or homeowners paying to install a solar system, will receive a 30% tax credit. This act established the most crucial financial benefit for the solar industry, which has propelled its immense growth in the last 10 years.
Unfortunately the Energy Policy Act intended for the ITC to end following December 31st, 2016. The new policy will reduce commercial tax credit from 30% to 10%, whereas homeowners will gain absolutely no credit at all. This is a major shift that will negatively affect everyone involved in solar, companies and homeowners alike.
What does this mean?
The reality is that the ITC needs to be extended. The tax credit is the largest magnet the solar industry has. Homeowners will shy away from solar when the same financial perks don’t exist.
In 2017, the first year after the change, we will lose 80,000 jobs in solar alone, not to mention the 20,000 jobs we will lose in related industries. That will not only end 100,000 careers but it will also crash our solar capacity by 8 gigawatts. That’s the lowest it will have been in 5 years.
We need to speak up and fight as a community and industry to extend the ITC, maintaining the affordability and accessibility of solar power. If the ITC is not extended, then between now and the end of 2016 will be the most opportune time to buy solar panels, have them installed, and benefit from your tax credit. So if you have been interested in going solar, now is the time to get educated and act fast.