Commercial Solar Investment Tax Credit
(ITC)​

Unraveling the Solar Investment Tax Credit:

Think of the ITC as a catalyst for your solar journey. It's a federal income tax credit designed to soften the financial impact of your initial investment in solar. In real terms, it means that if your solar setup costs $500,000, you're looking at a hefty $150,000 reduction in your federal income tax liability.

Can we monetize the ITC if we don’t have the tax liability?

The answer YES! In January 2023, the Inflation Reduction Act of 2022 (IRA) introduced a transformative opportunity for the renewable energy industry in the United States—tax credit transferability. For the first time, taxpayers generating eligible renewable energy tax credits can transfer (sell) these credits to qualified buyers seeking to offset their tax liability. This change effectively opens the door for businesses that do not have sufficient tax liability to benefit from renewable energy tax credits to monetize their credits through sales​.

Prior to the IRA, the transfer of renewable energy tax credits was prohibited, and developers had to rely on tax equity partnerships, where a partner with sufficient tax liability would contribute capital in exchange for most of the tax benefits. However, these transactions were complex and required legal, advisory, and accounting expertise. Now, with the new provisions in the IRA, developers and business owners have more options to monetize their tax credits.

The 30% Advantage: Grab it While You Can!

The full 30% tax credit is available for commercial solar installations completed between 2022 and 2032. It's a limited-time offer, with the credit set to decrease to 26% in 2033 and further drop to 22% in 2034.


Timing is Everything with the ITC:

To lock in the current 30% ITC credit, we need to sign a contract and get at least 5% of the work done. All the work needs to be up and running before January 1, 2026.
With the recent enhancements from the Inflation Reduction Act, the ITC is now a game-changer, reducing your solar installation costs by a massive 30%. Even if you don't have the tax liability upfront, the ITC is a financial ace up your sleeve. It effectively offsets the initial costs of solar panel purchase and installation, making it easier than ever to switch to solar power. With the ITC, you'll see immediate savings and have the confidence to invest boldly in a cleaner, greener future.