Through the newly enacted Inflation Reduction Act, a federal income tax credit (ITC) of 30% of the cost of a qualified system is available for all residential solar projects through 2032.
The federal ITC is a dollar-for-dollar credit that reduces your federal income tax liability for the year the system is placed in service. If you can’t use all the credits in the first year, it can “roll over” for several years after.
In order to utilize the tax credit, you must have taxable income to apply toward it and are advised to consult with a tax professional to see how it applies to you in your situation.
Through the newly enacted Inflation Reduction Act, for commercial solar pojects less than 1 megawatt, a federal income tax credit (ITC) of 30% of the cost of a qualified system is available through 2032.
For commercial projects 1 megawatt or more, an ITC of 6% of the cost of a qualified system is available through 2023.
Additional bonus tax credits of up to 70% are available for all commercial solar projects if it meets certain requirements as indicated in the table below.
Table 1: Investment and Production Tax Credit Amounts
*The ITC amount is a percentage of the total qualifying project cost basis. For projects >1MW AC, Domestic Content and Energy Community adders also assume labor requirements are met for full value.