This month, the U.S. House of Representatives Committee on Ways and Means reintroduced the Growing Renewable Energy and Efficiency Now (GREEN) Act. The committee hopes the Democrat-controlled house and senate will help pass the act this year. If passed, it would extend tax credits for renewable energy projects and build on extended tax incentives from 2020, which means there would be a lot of benefits and incentives for homeowners to reap, including helping many go solar or expand on their current systems.
The Federal Solar Investment Tax Credit (ITC) Would Increase
The current ITC gives you a federal tax credit of up to 26% of your solar cost. With the GREEN Act, the credit would go up to 30% for projects that begin construction between 2021 and 2027. The credit would then be 26% for projects that begin after 2027, 22% for projects after 2028, and 10% for projects after 2028. Those who make installing a solar system a priority would see the highest value. For more information, contact a qualified tax expert and consult with them.
You Could Get an ITC Refund Instead of a Credit
This is very exciting! Currently, the credit can be applied to the income taxes you owe at the end of the year. You do get up to five years to collect, however, if you do not owe any taxes, you will not be able to receive this tax credit.
With the GREEN Act, you could request up to 85% of the ITC as a refund, even if you did not have enough income to offset the credit. This major change would help more homeowners take advantage of the ITC incentive.
Batteries Would Get Their Own Incentive
Energy storage technology would receive their own ITC incentive. Buyers could receive a tax credit of 30% through the end of 2026. The credit would go down to 26% in 2027 and 22% in 2028. This new incentive would help more homeowners install batteries when going solar or expand on existing solar systems.
Electric Vehicles (EVs) Would Get an Extended Tax Credit
Another benefit of the GREEN Act would be the expansion of existing EV incentives for buyers. Currently, EV buyers qualify for a $7,000 tax credit for the purchase of an EV, until the manufacturer sells 200,000 cars.
The extension would grant manufacturers to continue giving a reduced credit for another 400,000 cars. After a manufacturer sells 200,000 cars, buyers would still receive a credit, but it would be $500 less. Eventually, the phase-out period would reduce the credit by 50% per the calendar year.
Interested in Going Solar?
If the GREEN Act passes, these benefits could be yours to take advantage of! Learn more about the solar options available through UMA today.