A recent IRS ruling was an unexpected gift for the renewable energy industry. On June 22nd, the bureau announced that they were extending the 30 percent tax credit for solar projects for another four years, giving developers a chance to avoid the costly tariffs bringing up costs on solar projects while still claiming the full financial incentive!
The announcement came as a surprise, but a welcome one nonetheless, as the decision is expected to help the solar industry continue to thrive, even though the tariffs on imported panels that continue to drive up costs. While SunPower is a USA based company, the decision is a big one for developers looking to build large-scale solar plants.
The announcement extends the solar investment tax credit through the end of the 2019 year, which means developers simply have to begin construction on their project before that time in order to be able to claim the four-year extension. Starting the project includes either breaking ground or investing at least five percent of the total cost of the installation. Doing so would give the developers until 2023 to finish the project and claim the full benefit of the credit.
Projects that begin as of January 1st, 2020 or later will receive a credit for up to 26 percent of their total value, with the amount of the credit dropping further year by year after that.
The tariffs on imported panels have no doubt put a burden on the solar industry and hampered growth, particularly for large installations which often seek to keep costs down by using imported panels. Thanks to this new announcement, these installations can begin and developers can avoid the tariffs altogether by waiting until they sunset in 2021.
How? With this ruling, developers only have to begin their project before the 2019 deadline—they don’t have to finish it. By simply starting the project before the end of the 2019 year, the developers can then wait until the panel tariffs subside in 2021 and then purchase their panels for their system to keep costs down. As long as the project is completed by 2023, the developer will still be able to claim up to 30 percent of the costs as a tax credit.
This means solar installations will continue to remain affordable and the renewable energy industry will continue to grow for many years to come!
Learn more about converting your home or business over to green, renewable solar energy by calling the Southern California solar installers from SunPower by Sea Bright Solar at (909) 480-3783 today!