Patrick Crowley

Patrick Crowley
Head of Sales & Operations

Rex Kehoe

Rex Kehoe
Director of Installers

Will the Solar Tax Credit Get Extended?

July 26, 2019

In this week’s livestream, Patrick and Rex go over the newly proposed Solar Tax Credit extension. We will learn about the current step down schedule, the proposed new step down schedule, and what we can expect from this extension. 

What is the Federal Solar Tax Credit?

In 2005, the George W. Bush passed the Energy Policy Act. The act issued the first of its kind: investment tax credits (ITC) for renewable energy which essentially incentivizes homeowners who install solar panel systems onto their homes. The bill was set to expire in 2007, however, it has since been extended and revised. Currently, the ITC is nearing its tail end of the full 30%. In 2020, the credit steps down to 26%, and in 2021, it reduces to 22%. In 2022, the credit will reduce to 10% for commercial solar and 0% for homeowners.

Watch this video below to learn about the ITC.

Watch this video to learn more about the Solar Tax Credit.

Here’s the current ITC step down schedule:

Solar Tax Credit Schedule


Solar Tax Credit extension

Proposed ITC Extension Bill

Just recently, the U.S. House and Senate introduced legislation that would extend the 30% incentive for 5 years. If passed, this will be the third extension of the tax credit. We’re unsure what the likelihood of the bill being passed due to the lack of climate action from the current presidential administration.

Solar Tax Credit Step Down ScheduleThe proposed legislation will mirror the current ITC step down schedule, and it will be extended for five years at the full 30% starting 2020. The first step down will be 26% in 2025 , and will reduce to another 4% in 2026.  After this final step down, it drops down to 10% for commercial solar and 0% for homeowners.

Solar Tax Credit Extension

What the Solar Tax Credit Extension Can Expect to Accomplish

With the extension of the Solar Tax Credit, we can expect the solar market to expand and reach new heights in very short years. According to the Solar Energy Industries Association, the U.S. is currently on track to reach 3 million installations by 2021. With the extension of the tax credit, this may give homeowners considering solar another opportunity to seriously consider making the switch. Thus, solar penetration will reach outstanding numbers in the next few years. Many states have targets to meet carbon-neutral goals in the next 20-30 years; with this extension, more normalization of climate action and clean energy may be in effect. California continuously ranks as the top solar market leader in the U.S. followed by other coastal states like New York, Massachusetts, and Florida. However, with the extension, other states will likely become more prevalent in the solar market.

Solar Tax Credit Extension

The Time is Now

The best time to go solar is now! Ideally, homeowners should choose their installers very soon to ensure they have enough time to claim the 30% ITC, and own a functioning system.  Based on permitting timelines and a rush on the market with expiring incentives, some states recommend signing with a preferred installer as early as mid-August. If you have questions about choosing the right installer, Pick My Solar’s online solar platform will be your guide and our Energy Advisors will act as your solar advocate throughout the process.

Do you think the 30% tax credit will be extended? Why or why not? Thoughts? Share them with us!


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