President Obama Signs Omnibus Budget: Includes Solar ITC Extension and Bonus Depreciation

Congress and the President recently agreed on a budget that will extend tax credits for various renewable energy systems, representing the strongest Congressional policy in recent years to support the continued development of renewable energy sources.The 30% Solar Investment Tax Credit is now extended for commercial projects that begin construction before the end of 2019. The tax credit will then decrease to 26% in 2020 and 22% in 2021 for projects begun in those years, respectively. Projects that are under construction must be placed in service by December 31, 2023 to qualify for these tax credits. The Solar ITC will then revert to a permanent level of 10%.There is also a bonus depreciation extension for solar systems acquired and placed in service through 2019, resulting in an acceleration of the cash tax shield created by the solar project’s depreciation expenses. The bonus depreciation percentage is 50% through 2017, 40% in 2018, and 30% in 2019.This prudent policy development will rapidly grow the solar industry, and will help solar energy to compete more effectively with the massively subsidized traditional oil and gas industry.To learn about how your company can go solar and take advantage of Federal incentives, please contact us at (888) 225-0270 or visit our website.