Last month, on June 22, the House Committee on Transportation and Infrastructure approved a huge package that will improve the infrastructure of the United States during the coronavirus pandemic. The most important part of this entire act for the solar energy department is the federal solar tax credit. With the federal government giving these many incentives to Americans to switch to clean energy, solar is becoming more and more bright.

 

Comments from the Bill on Clean Energy

 

Although this bill covers a vast portion of different businesses and infrastructures within the United States, there is a specific passage relating to clean energy. Here are the comments from the Moving Forward Act.

  • Modernizes our energy infrastructure for a clean energy future by investing more than $70 billion to transform our electric grid to accommodate more renewable energy, expand renewable energy, strengthen existing infrastructure, help develop an electric vehicle charging network, and support energy efficiency, weatherization, and Smart Communities infrastructure.
  • Reinvigorates our commitment to renewable energy and combatting the climate crisis by building on current successful tax incentives that promote the deployment of green energy technologies while providing new incentives for activities that reduce carbon pollution.
  • Encourages “greening the fleet” by supporting widespread adoption of zeroemission cars, vans, and buses through tax credits for purchasing vehicles, supporting zero-emission vehicle manufacturing, and deployment of publicly accessible electric vehicle charging infrastructure including underserved communities.
  • Promotes green energy and efficiency projects that adopt high-road labor practices.”

 

What does the Federal Solar Tax Credit Mean?

 

According to Solar Reviews, this tax credit will:

The new incentive step down schedule would be as follows:

  • Restore the federal tax credit to 30% until December 31, 2025
  • Step down the tax credit to 26% in 2026
  • Step down the tax credit to 22% in 2027
  • Set the tax credit expiration date to January 1, 2028

Right now, solar system owners can qualify for a tax credit that’s equal to 26% of the costs of their solar installation. However, the tax credit drops down to 21% in 2021, and expires on January 1, 2022. The starting date of the extension cannot be determined until the bill has been passed.