Just as it was set to expire at the end of 2023, the Federal Investment Tax Credit (ITC) is voted back! For as long I have been in the solar industry, over 15 years, the Federal ITC has been an integral financial incentive for anyone going solar in the US. Now, as it has been written in the Inflation Reduction Act of 2022, the tax credit will begin at 30 percent and step down to 26 percent in 2033 and 22 percent in 2034. That is a full additional 11 years of ITC, just as everyone was expecting it to expire! This single policy change, has massive ripple effects in the preservation, and continued growth, of the US solar industry and renewables moving into the next decade.
One of the most impactful provisions in the bill, which can be read in full text here, is the long-term extension of the ITC, which has been instrumental in launching the solar industry we know today. The bill calls for a 10-year extension at 30 percent of the cost of the installed equipment.
The tax credit applies to residential adopters of solar technology. Bonus, the 30 percent credit will be retroactively applied to anyone who installed their system since the beginning of 2022!
The 30 percent credit also applies to energy storage whether it is co-located or installed as standalone energy storage. This enables the retrofit of a battery to a solar array while taking advantage of the credit.
As we make known to all our solar customers, per the US tax code, a 'home' can be classified as your sailboat, or motor yacht as long as it has a galley, head, and bunk AND it must be US registered. It could be your primary or secondary 'home'. Also the credit language now officially includes battery storage, which was a bit vague prior to this new extension. For any of our customers going solar, the 30 percent is on the "total system cost on all equipment required to place the system in service;" which includes panels, wiring, breakers, charge controllers, inverters, battery monitors, installation labour expenses, and now battery storage. We also feel arches, bimini frames, or canvas retrofits, as well as even the construction of a hard top bimini are all eligible as possible system costs if they were required to place the system in service on your particular vessel. We are not certified tax advisors, and would encourage you to contact yours with your own specific system costs for review.
We are really excited to be able to help all our customers go solar, and now with the majority of them able to reduce their costs with this 30% Federal tax credit. There has not been a better time to join the ever growing number of sustainable sailors and boaters who are silently charging their batteries with free energy from the sun. Drop us a line with any questions or check our our tax credit page for more details.