Category: "Solar Tax Incentives"

12/28/20

  02:04:00 am, by Jim Jenal - Founder & CEO   , 605 words  
Categories: All About Solar Power, Solar Tax Incentives, Residential Solar

Happy New Year - the Solar & Storage Tax Credit is Extended!

Ok, so of course it took some last minute drama - this is 2020 after all - but the extension to the federal tax credit for solar and storage has been signed into law!  Read on to see what that means for you!

State of the Law Going into Deliberations

New project for the New Year!

This new project will get the full 26% tax credit next year!

As readers of this blog would surely know, the federal tax credit that had been set at 30% for several years, dropped down to 26% in 2020 (just the first of many not-so-desirable outcomes for a year that would see so many!), and was scheduled to decline to 22% for 2021, before expiring completely in January of 2022 for residential solar projects. 

We have written before that the solar tax credit was quite popular on both sides of the aisle, so there was always some hope that the current credit rates might be extended, but that was by no means a sure thing.  Fingers crossed and all that!

A Bill is Born!

As the negotiations between the Trump Administration and Congressional leaders progressed to try and provide economic stimulus at a time when many are out of work, too many facing potential evictions, and state and local governments facing severe challenges, word came out from CALSSA that the extension of the tax credit was in the draft bill!  Then on December 21st we learned that the extension was in the final bill that was being sent to the President!  (For those who are true gluttons for punishment, here’s a link to the Bill, and the language for the residential extension is on page 4,915!  Crazy, right?)

Excited by this most welcome development at the end of a dark year - and just in time for Christmas! - I was ready to write this blog.  But hey, this is still 2020, so I resolved to keep my powder dry until the Bill had actually been signed!

Drama

Seems my hesitation was warranted, as the President declared the Bill - negotiated by his Administration - a “disgrace” and threatened to veto it!  Instead insisting that the relief payments be substantially increased (something his own party rejected) and the “pork” in the bill be removed.  (News coverage of the President’s displeasure focused on exemptions for “three-martini lunches” (who is doing that these days?) or depreciation schedules for race horses!  The solar tax credit did not seem to be part of the pork in question.)  Of course, one man’s pork is another man’s livelihood, and besides, you cannot really take an agreement that took literally months to hammer together and then redo it in days.  Didn’t the President ever see, “I’m Just a Bill?”

All’s Well that End’s Well

So after much Sturm und Drang, on Sunday the Bill became a Law!  Which means we can tell you exactly how things will progress going forward on the tax credit front:

The 26% credit will now continue for projects “placed in service” between now and the end of 2022.  The 22% credit will apply to projects placed in service between January 1, 2023 and December 31, 2023.  Projects that go into service after January 1, 2024 will receive no credit under this new law.

Given the stimulus value of solar and storage projects - to say nothing of their environmental benefits - this is a most welcome development.  And for projects that got delayed due to the pandemic, the full 26% credit will still be available next year - a relief to many homeowners and solar installers who have been up against the clock.

In the end, the process was messier than it needed to be, but the job got done.  Here’s hoping that 2021 and 2022 can be real boom years for the solar industry, and the broader economy as well!

 Permalink

07/22/20

  02:36:00 am, by Jim Jenal - Founder & CEO   , 407 words  
Categories: All About Solar Power, Solar Tax Incentives

How do you spell Relief: S O L A R!

United States Capitol buildingAs Congress tries to come to consensus on another stimulus package, we are focused on something that could help rebuild the economy in a greener way.  Here’s our take, and a call to action!

Congress is now back in session, and task number one is to come up with a new round of stimulus spending to try and get the economy moving again, amidst the chaos of the worst pandemic in a century.  This is a big crisis, and it calls for big and bold solutions.

Our friends over at Solar Rights Alliance are good at thinking up big ideas, and they are johnny-on-the-spot now.  Here are a couple of key concepts that should be included in the next stimulus bill:

  • Extend the federal solar tax credit - presently the federal solar investment tax credit (ITC) is set to step down from 26% to 22% at the end of this year, and expire altogether after 2022.  The ITC should be extended at the prior 30% rate through 2025.  This is vitally important as utility-sponsored rebates have disappeared in many areas, leaving the ITC as the primary economic incentive.

  • Turn the ITC into a direct cash payment for at least the next twelve months.  While tax credits are great, if you aren’t working, you can’t use a tax credit.  Direct cash payments upon completion of the project would help close the liquidity gap that would otherwise keep projects from going forward.

These two simple steps would help restart the solar industry, resulting in thousands of good paying, can’t-be-outsourced jobs for workers across this country.  Moreover, home and business owners would lower their energy costs, leaving them with more money in their pocket to spend in their communities.  And on top of all that, we would be helping to green the grid, lowering greenhouse gas emissions - a necessary step in the battle to reverse climate change.

Sounds pretty good, right?  Damn straight!  But in this time of crisis, silent approval isn’t enough - action is required!

Fortunately we can make that action really easy.  Just click on that big, Take Action! button below and you will be redirected to a website where you can send an email to your U.S. Senators and Representative, urging them to take action to grow solar and jobs in the next stimulus.  It takes all of one minute to do it, but the benefit could be felt for years.  So what are you waiting for?  Mash that button now!

 TAKE ACTION!

04/15/19

  11:24:00 pm, by Jim Jenal - Founder & CEO   , 430 words  
Categories: Solar Tax Incentives, Residential Solar

It's Tax Day - what's that got to do with residential solar?

Tax day!At the risk of being the bearer of bad tidings, today is Tax Day!  So—apart from really bringing you down—what has that got to do with installing solar on your home?  Well here’s the thing, for quite some time now, solar installations have enjoyed a 30% federal tax credit that can be stretched out over 20 years.  Indeed, with the demise of all of the local, utility-provided rebates, the federal tax credit has been the last incentive standing.  But guess what—it too is scheduled to go away.  Here’s what you need to know…

For some folks the thought of going solar now is leavened by the belief that something much better will be coming soon.  But aside from the very real opportunity cost that arises from delaying that solar install, there are now imminent tax consequences to consider.  In particular, here is the schedule of declines to the federal tax credit for solar:

  • Now until December 31, 2019 - the full value of 30% on the cost of the system.
  • January 1, 2020 through December 31, 2020 - 26%.
  • January 1, 2021 through December 31, 2021 - 22%.
  • January 1, 2022 - ZERO!

So over the next two years a relatively gentle step down (though 4% on a $25,000 project is still $1,000 you would be leaving on the table) each year, but then it falls off a cliff as the credit goes away entirely!

Moreover, it is important to note that the credit is only available for projects that are “put in service” in the associated calendar year; which for all intents and purposes for residential projects, that means that you have received Permission to Operate from your utility.  And that is where the real issues arise.  We have seen this before—whenever a major incentive is scheduled to decrease (or go away entirely), there is a last-minute rush to get projects installed and PTO issued.  But utilities operate on their own timelines, and as the number of projects pending increases, so does the amount of time that it takes to get approved.

For potential Run on Sun clients, you should know that we will be issuing a cutoff later in the year beyond which time we will not be able to guarantee that you receive PTO this year.  That will be a function of both our pipeline, and more importantly, the pipeline for approval at the various AHJ’s and utilities in our service area.  Watch this space for updates.

Bottom line—if you are seriously considering going solar this year, and capturing that full 30% federal tax credit, Do Not Wait!  Give us a call, get into the queue early, and rest easy, knowing that next year, Tax Day will be a whole lot sweeter!

11/17/16

  06:57:00 am, by Laurel Hamilton   , 342 words  
Categories: All About Solar Power, Solar Tax Incentives

Five Reasons the ITC Won't be Scrapped

At Run on Sun we don’t take partisan stances on politics. We believe everyone, regardless of politics, benefits from harnessing the unlimited resource of sun-powered PV systems. However, the recent election has raised questions about the future of federally-backed support for solar - specifically the federal solar investment tax credit (ITC). The short answer is, we are optimistic the current plan for the ITC to continue for three years at 30% then gradually sunset after five will be unaffected. Here’s why:

  1. CongressThe ITC is federal law. The President cannot change federal law by executive order without an act of Congress to change it.
  2. Congressional acts require 60 votes in the Senate. Policy decisions in Congress such as changing a tax law, require enough votes to overcome a filibuster. The post-election makeup of Congress would require bi-partisan support to pass any changes to the ITC. 
  3. Solar is good for the economy. The solar industry has proven to create local, living-wage jobs that cannot be exported. Everyone knows job-creation receives bi-partisan support.
  4. Solar has already received bi-partisan support. Leaders see solar not only as an environmental solution but an economic one, as well as an avenue for fuel independence. These reasons and more helped get the ITC extended last year by champions on both sides of the aisle.
  5. State and local policies will prevail. Regardless of what happens at the federal level we can count on state and local policy to continue to support a thriving solar industry in California and many other states where the benefits are undeniable.

The fact is, the ITC is federal law and laws are not easily changed. Even if it did somehow manage to be changed before the 5-year planned sunset, we are confident our state will step up to make sure adequate support continues to make solar an economically viable option for the public. Never fear! Solar is here to stay. 

(Thank you to CALSEIA and Executive Director Bernadette del Chiaro for the inspiration for this blog and for their invaluable efforts to advocate on behalf of the solar industry.)

12/31/15

  09:01:00 am, by Jim Jenal - Founder & CEO   , 826 words  
Categories: All About Solar Power, Solar Tax Incentives, Climate Change, Ranting, Energy Storage, Net Metering

Top 5 Reasons Solar Soared in 2015!

There can be no doubt, 2015 was an amazing year for solar.  As we reach the end of the year, here’s our look back on the top five reasons solar soared in 2015!

5. Run on Sun had its Best Year Ever!

Run on Sun Top 500 Solar Contractors

While not the most important reason for solar overall, we would be remiss if we didn’t acknowledge that thanks to our wonderful clients, 2015 was our best year by far!  From our largest project ever for our favorite water company, to adding another school to our portfolio, to the many residential projects that we built all across Southern California, 2015 was a great year.

We took great pride in being recognized, for the third year in a row, as being one of the top Solar Contractors in the country by the wonderful folks at Solar Power World, and even more pride in the scores of referrals that we received from our ecstatic clients.

We can’t wait to meet and exceed our success this past year in the New Year ahead!

4. Politicians that Got It!

Political leadership on dealing with Climate Change was finally in evidence this year, and the resultant policies are, inevitably, pro-solar.  Exhibit A was California Governor Jerry Brown pledging to have the state generate 50% of its electricity from renewable sources by 2030, a mere fifteen years away!  Said the Governor:

I envision a wide range of initiatives: more distributed power, expanded rooftop solar, micro-grids, an energy imbalance market, battery storage, the full integration of information technology and electrical distribution and millions of electric and low-carbon vehicles.

We are on board with that!

But  political leadership extended far beyond the borders of our great state in 2015!  More than 190 countries came together in Paris to agree to the most far-reaching accord ever to address Climate Change, and lots more solar was high on their list of ways to achieve a more sustainable planet.

To be sure, none of these actions were without their political opponents, but it is impossible to deny that 2015 marked a major turning point in the public’s perception of the need to act, and those views were increasingly adopted by the world’s politicians.

3. Smart Energy Storage (Finally) Comes of Age (Almost)!

Ok, we have to give the man his due — Elon Musk’s outlandish PowerWall announcement changed the conversation around smart energy storage (and our blog post debunking his most outrageous claims became our most viewed post of the year!).  Indeed, storage went from being a topic hardly ever mentioned by a potential client, to something that nearly everyone did after Elon did his thing.

Unfortunately, the hype still leads the market, and mature products are still not really available.  But that is changing rapidly, and from our perspective that can’t happen soon enough.

2. Net Metering 2.0 Saves Solar in California — We Hope!

There had been great angst in the solar community about the future of net metering — the means by which solar owners get compensated for excess energy that they put out onto the grid — in California (and elsewhere).  Decisions about net metering in other states that bent over backwards to appease utility demands only ratcheted up the anxiety in California as the state’s Public Utilities Commission deliberated over competing proposals for Net Metering 2.0 - including utility schemes that could have gutted the market for solar.

Fortunately our fears were not realized and the preliminary decision — due to be made final in January — was quite solar friendly.  Once we have a final decision we will report on it in depth, but for now this looks like one of the biggest pro-solar developments of 2015.

1. Federal Solar Investment Tax Credit is Extended!

Losing money if the ITC goes away!The number one, most amazing, and most amazingly unexpected development to boost solar in 2015 is unquestionably the major extension of the 30% federal solar investment tax credit (ITC).

Given that the ITC was previously scheduled to expire at the end of 2016, solar installers, potential clients, utilities, and building departments alike were all bracing for what could have been a hellish second half of next year as all involved scrambled to get systems commissioned before the deadline.

Instead, the full 30% will continue through 2019, 26% in 2020, 22% in 2021, and 10% thereafter.  Moreover, the “placed in service” language — which required a project to be commissioned before the credit could be claimed, thereby leaving installers and clients at the not-so-tender mercies of the local utility — was replaced by the far more manageable, “commenced construction” requirement.

The net benefit of this will be a more orderly market, driven by rational purchasing decisions rather than a panicked stampede to meet an arbitrary deadline at the end of next year.  And beyond that, keeping the ITC in place for many years to come will help to grow solar in ways that would not have been possible otherwise.  The industry, the economy, and the environment were all winners here.

So that’s our wrap on 2015 — truly a great year for solar!  But we are betting that 2016 — with your help, of course — will be even better!  Watch this space!

Happy New Year!

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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