President Biden signed the Inflation Discount Act into legislation on Tuesday, August 16, 2022. One of many many issues this act accomplishes is the enlargement of the Federal Tax Credit score for Photo voltaic Photovoltaics, also called the Funding Tax Credit score (ITC). This credit score could be claimed on federal earnings taxes for a proportion of the price of a photo voltaic photovoltaic (PV) system.
Let’s check out the most important adjustments and what they imply for Individuals who set up rooftop photo voltaic:
- The ITC elevated in quantity and its timeline has been prolonged. Those that set up a PV system between 2022 and 2032 will obtain a 30% tax credit score. That may lower to 26% for techniques put in in 2033 and to 22% for techniques put in in 2034. Should you’ve already put in a system in 2022, your tax credit score has elevated from 22% to 30% when you haven’t already claimed it.
- The photo voltaic+storage tools bills included within the ITC have expanded. Now, vitality storage units which have a capability score of three kilowatt hours or larger are included. This consists of stand-alone storage, however right here’s why it’s best to pair it with photo voltaic.
The ITC will reduce the price of putting in rooftop photo voltaic for a house by 30%, or greater than $7,500 for an common system. By serving to Individuals get photo voltaic on their roofs, these tax credit will assist tens of millions extra households unlock an extra common financial savings of $9,000 on their electrical energy payments over the lifetime of the system.
Try the House owner’s Information to the Federal Tax Credit score for Photo voltaic Photovoltaics for extra info on the ITC together with eligibility necessities and the right way to declare it in your taxes.