Extended renewable energy tax credits have been included in a $1.4 trillion federal spending package alongside a $900 billion COVID-19 relief package. This includes an extension of the federal investment tax credit (ITC), also known as the solar tax credit, for solar electric systems. The tax credit was scheduled to drop from 26% to 22% in 2021, but will now stay at 26% for two more years. The wind industry also received a limited extension for its production tax credit.
The New Relief Package
President Donald Trump signed the relief package on December 28, 2020.
This means that solar projects in all market segments — residential, commercial, industrial, utility-scale — that begin construction in 2021 and 2022 will still be able to receive a tax credit at 26%. All markets will drop to a 22% tax credit in 2023, and the residential market will drop to 0% while the commercial and utility markets will sit at a permanent 10% credit beginning in 2024.