ASTI Newsletter | Fall 2015 Edition | by Byron Pakter
The short answer is yes, the 30% solar tax credit is available until December 31st 2016. The solar Investment Tax Credit (ITC) is the federal government’s most important cost reduction program for solar power systems. It applies a 30% reduction to the total system costs including system components, labor, and building materials. For municipal rooftop system this can results in a discount in the tens of thousands for a small building. However, for large solar projects like recreation center rooftops or big parking area carports the savings can be in the hundreds of thousands.
On the upside the deadline is that it puts a hot iron under the seats of solar investors and developers. By giving them a sense of urgency new jobs are flooding in and solar deployment may be on target to surpass all previous yearly records.
Some people are also in support of the argument that solar PV costs have fallen so far in the past years that the tax credit is not needed to continue growth, and that a governments role in stimulating technological development is to giving fledgling industries a big push to get them started; after that they have to fly on their own.
On the other hand, when the current 30% ITC falls to 10% for commercial properties at the end of 2016 we’re going to see lots of potential solar projects moving to a price point that makes them unattractive. Many other projects that remain feasible beyond ITC are going to see changes to 3rd party ownership and financing that substantially reduce the estimated savings.
What does this all mean to your agency? First off take a look at state and local incentives that maybe expiring alongside the ITC. You may find out the clock is moving faster than you expected, and if you’ve been planning to take advantage of solar it means that it’s best to move on it as soon as possible. If you’re not sure what other incentives exist in your region, or how to evaluate whether solar is right for your community, contact your Solar Roadmap representative. They can guide you through this process and even provide a free solar potential evaluation for your community. If you’re not currently participating in the Solar Roadmap, sign up here.
One final note, the current ITC deadline requires qualifying systems to be in operation by the end of 2016. Planning, permitting, and developing a solar project takes can take several months. Take action now and you are still likely to be in operation before the deadline. If your agency doesn’t have the means to go it alone consider adding yourself to a regional or cooperative solar project, these often have bulk pricing benefits and on top of that you will get the federal ITC savings just in time.
