- The US Congress has extended solar ITC by 2 years and wind PTC for 1-year
- It is part of the $900 billion COVID-19 relief package and an omnibus spending bill for 2021
- Solar ITC will continue at the current rate of 26% for projects entering construction over next 2 years, coming down to 22% in 2023 and finally down to 10% for commercial projects in 2024
In this ‘unprecedented’ year when the US solar PV industry was losing all hope of US President Donald Trump’s led administration to heed its call for extension of the solar Investment Tax Credit (ITC), the ‘unprecedented’ has actually happened. The solar ITC has been extended by 2 years.
All thanks to US Congress clearing a $900 billion COVID-19 relief package and an omnibus spending bill for 2021 under which the solar ITC has been extended for 2 years and the Production Tax Credit (PTC) for wind energy has got a 1-year extension. An additional 30% ITC has been introduced for offshore wind projects that enter construction through 2025.
The Solar Energy Industries Association (SEIA) said the solar ITC will remain at the current 26% for projects that enter construction in 2021 and 2022. It will drop to 22% in 2023 and eventually down to 10% in 2024 for commercial projects. For small scale or residential projects, it will end completely.
Projects that enter construction in 2021 will have a 4-year period to place the projects in service to take advantage of the ITC but all such projects must come online before January 1, 2026.
This extension comes with additional funding for research and development, including on soft costs critical to distributed energy deployment and support for more sensible access to federal lands for renewable energy projects, added SEIA.
The legislation has been cleared by the House of Representatives as well as by the Senate.
The American Council on Renewable Energy (ACORE) President and CEO Gregory Wetstone said, “With 13% of the clean energy workforce out of a job this holiday season due to COVID-19, we are grateful that lawmakers included commonsense emergency relief measures for the renewable sector in this package,” and added, “These policies will help get people back to work, accelerating our economic recovery and achieving greenhouse gas emissions reductions that scientists tell us are necessary to protect our climate.”
Just a year back in December 2019, the Trump administration had rejected solar PV industry’s demand for extension of 30% ITC (see US Solar Industry Loses Fight For 30% ITC Extension).