- The U.S. Investment Tax Credit (ITC) is a solar incentive that provides a 26% federal tax credit for
eligible costs of going solar.
- In December 2020, Congress passed an extension of the ITC, which provides a 26% for systems commencing construction in 2020-2022
- 22% for systems commencing construction in 2023
- 10% for systems commencing construction in 2024 or thereafter.
- Any PV system placed in service after 2025, regardless of when it commenced construction, can receive a maximum tax credit of 10%.
- Typically, a solar PV system that is eligible for the ITC can also use an accelerated depreciation corporate deduction
- Bonus Depreciation: Solar systems qualify for 100% bonus depreciation in year one.
The Modified Accelerated Cost Recovery System (MACRS), is a method of depreciation in which a business’ invest aments in certain tangible property are recovered, for tax purposes,
over a specified time period through annual deductions.