How does the Federal Solar Tax Credit work?
Answer: The program provides a percentage credit against a solar system purchase. If you are a W2 employee, the total annual withholding tax taken from your paycheck is eligible for the ITC.
Example:
Solar System Gross Cost: $30,000
26% ITC= $7,800
W2 withholding tax taken from paycheck for the year = $10,000.
You would receive back the entire $9,000 the following tax season.
Does the government provide federal solar tax credit?
Answer: Yes. The US government offered a 30% Investment Tax Credit for solar systems until the end of 2019. In 2020 the rate went to 26%. It was scheduled to go down to 22% in 2021 and then to 10% in 2022, however Congress extended the Federal Tax Credit in 2020 to remain at 26% for the years of 2021 and 2022.