Solar ITC Extends at 26% For Two More Years, Included in US COVID Relief Pkg

Solar ITC Extends at 26% For Two More Years, Included in US COVID Relief Pkg

The Solar Investment Tax Credit (ITC) has been extended at 26 percent for two more years. The ITC for solar systems as well as new funding for energy storage research has been included in the US COVID-19 relief package, the Congress approved.

USD 1.4 trillion federal spending package alongside a USD 900 billion COVID-19 virus relief spending bill includes the solar ITC, which was scheduled to drop to 22 percent in 2021, will stay at 26 percent.

Alongside, the wind industry also received a limited extension of its production tax credit.

The solar projects in all market segments including residential, commercial, industrial, and utility-scale that begin construction in 2021 and 2022 will still be able to receive a tax credit at 26 percent. All markets will drop to a 22 percent tax credit in 2023, and the residential market will drop to 0 percent while the commercial and utility markets will sit at a permanent 10 percent credit beginning in 2024.

The USD 900 billion COVID package also includes funding for distributed energy deployment as well as support to provide better access to federal lands for renewable projects. The 5,593-page legislation – which is said to be the longest bill ever passed by Congress – is soon expected to be signed into law by President Trump.

Abigail Ross Hopper, president and CEO of Solar Energy Industries Association (SEIA) stated, “This pandemic has taken an immeasurable toll on American families, and our deepest sympathies are with those who have lost loved ones and those who are suffering economically because of the ongoing crisis. Over the next few years, we have an opportunity to build a stronger, more reliable, and more equitable American energy economy and the action Congress is taking today is a helpful down payment.”

“We are heartened to see Congress step up to provide Americans with some relief after our country has been mired in a public health and economic disaster,” she added. 

The Better Energy Storage Technology (BEST) Act authorizes USD1 billion over five years for federal investments into energy storage R&D. The CEO of BEST, Kelly Speakes-Backman commented, “The inclusion of BEST Act as part of the year-end spending and relief package is further proof of the bipartisan, bicameral support for energy storage to improve grid reliability and flexibility.”

“We look forward to working with DOE and Congress to ensure this important program is fully funded and operates effectively. This demonstration program advances storage technology innovation and grid operations and sets the foundation for future storage deployments to protect our electric infrastructure against disruption as it enables a zero-carbon energy supply mix,” she added. 

“These policies will help get people back to work, accelerating our economic recovery and achieving greenhouse gas emissions reductions”, said Gregory Wetstone, president and CEO of the American Council on Renewable Energy.

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Bhoomika Singh

Bhoomika is a science graduate, with a strong interest in seeing how technology can impact the environment. She loves covering the intersection of technology, environment, and the positive impact it can have on the world accordingly.