Some great energy-related news coming out of Congress! The spending bill – which was signed into law just yesterday – includes a two-year extension of the Investment Tax Credit (ITC) at the current 26%, rather than decreasing yet again at the end of this year. The ITC has spurred huge amounts of private investment in renewable energy. This is a big win for renewables!
The tax credit was originally 30% of the total installed system cost. The ITC was due to step down in 2021 to 22%. This was part of a planned phase out of the credit, which was negotiated several years ago when the credit was extended. Eventually, the residential ITC will expire (in 2024) and the commercial ITC will remain at 10% (as of 2024). It's important to note that the residential portion of the ITC was always set to expire – originally due to drop to 0% in 2022. The spending bill extended the entire phase-out schedule and the expiration dates by two years. The phase out of the ITC was last extended in 2015, and it remains to be seen what will happen in 2023/2024 and if there will be push for another extension. The figure below shows the updated phase-out schedule for the credit.
Read more here:
- Dec. 21, Billings Gazette: Montana priorities included in must-pass congressional bills
- Dec. 22, GTM: Congress Passes Spending Bill With Solar, Wind Tax Credit Extensions and Energy R&D Package
- Dec. 24, GTM: What Renewable Energy and Energy Storage Did, and Didn’t, Get from Congress This Week
- Learn about Renewable Energy Financing & Incentives in Montana