Lawmakers Reportedly Agree on Extension of Solar Investment Tax Credit
Reports out of Washington indicate that Republican and Democrat lawmakers have agreed on an extension of the Solar Investment Tax Credit (“ITC”) as part of a larger deal to avoid a government shutdown. The spending deal is reportedly tied to a package of tax cuts and extensions, which includes a five-year extension of the ITC. The reported details of the ITC extension are as follows:
- Current level of 30% of Qualified Project Costs to remain through 2019.
- Credit is reduced to 26% of Qualified Project Costs in 2020.
- Credit is reduced to 22% of Qualified Project Costs in 2021.
- Credit is reduced to 10% of Qualified Project Costs in 2022 and beyond for non-residential and third party owned residential projects but does not apply to host owned residential projects.
- Projects that commence construction by the applicable deadline will qualify for the ITC provided they complete construction by the end of 2023.
The extension is expected to be before the House of Representatives for a vote later week, with a vote in the Senate to follow thereafter. President Obama is expected to sign the bill if it is passed by Congress. If approved, the ITC extension will pave to way for the continued growth of the US solar industry.
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