The solar investment tax credit (ITC) is one of the most lucrative ways to reduce the investment costs of your solar installation, but in order to maximize this incentive, it’s important to include solar power in your 2019 planning. Follow this guide to ensure your business is able to take advantage of the ITC before it starts to ramp down.
Your business falls into one of these eligible sectors
- Other sectors can take advantage indirectly
You installed eligible solar technology
There are a variety of eligible renewable energy technologies – one of them is a solar photovoltaic (solar PV) system that uses solar energy to generate electricity for your business.
Your installed solar equipment meets performance and quality standards
Professional installation by Centrica Business Solutions using highest-quality Tier 1 components will ensure you meet this criteria for the ITC.
You meet usage guidelines
In general, the original use of the system must begin with you (the taxpayer), or the system must be constructed by the taxpayer using a licensed and professional solar installer.
You own your solar energy system
Power Purchase Agreements (PPAs) and leased solar systems do not qualify. Instead, the owner of the system monetizes the ITC and passes the savings along to your business.
You must complete IRS Tax Form 3468
When you file your yearly federal tax return, you take a dollar-for-dollar credit for what your business would have otherwise owed in taxes. If you don’t have enough tax liability to claim the entire credit in one year, you can roll over the remaining credits into future years. If you have any questions about how going solar may impact your individual tax situation, we recommend that you consult with a tax professional.
You must act now to claim the full 30%
The ITC is currently 30% of your system cost. You must begin construction of your system by December 31, 2019 to qualify for the 30%. Beginning in 2020, the ITC will ramp down:
- 2020: 26%
- 2021: 22%
- 2022 onwards: 10%
Talk to Centrica Business Solutions for more detail on how to navigate this opportunity for your business and take advantage of this incentive before it expires. Visit us here to learn more.