The Energy Policy Act of 2005 created the Solar Investment Tax Credit (ITC). It set a solar tax credit of 30% of a solar system’s costs for homeowners and commercial business owners who install solar panels. The tax credit (not a write off, an actual credit to pay income taxes) stood at 30% until the end of 2019. However, in 2020 the benefit dropped to 26%.
The credit was scheduled to decrease again at the start of 2021 to 22%. However, the federal spending package and COVID-19 virus relief spending bill passed in the final days of 2020. As a result this act held the ITC at 26% for 2021. It was at 26% through the first half of 2022, and set to drop to 22% in 2023. In 2024 it was to go away completely for residential systems…
But in the summer of 2022 the Inflation Reduction Act reinstated the ITC at 30% for both residential and commercial solar. This is great news for homeowners and business owners. The ITC now stands at 30% for ten years.
The Federal Investment Tax Credit now provides the full 30% benefit. This solar incentive looks stable into the future; it will reduce your tax liability when you install renewable energy. However, other factors such as Net Energy Metering rates still make today the right time to get your solar system installed. Our team at HES Solar is ready and knowledgeable. We will guide you through the process. Your HES Solar system will produce renewable energy for you and also get you your maximum tax credit benefit
The residential-only entity HES Solar has redefined its scope and has narrowed its focus to home solar service and home battery service. The impact of 2023 California regulations to home solar projects has required this company truncation; we regret the elimination of new home energy installations from our offerings. HES Solar now concentrates on supporting existing systems with maintenance and repair services for HES Solar and non-HES Solar systems and remains available for workmanship warranty work on qualified HES Solar systems.
For commercial solar and commercial energy storage design, installation, service, and O&M offerings, please visit the HES Renewables website hesrenewables.com.
A note on the state of California residential solar: The residential solar industry has faced significant financial hurdles in the last few years as a direct result of hostile policy, most notably NEM 3.0. Our primary trade partner, SunPower, went into Chapter 11 in August, 2024, and a majority of other solar companies, large and small, have been forced to close, leave California, or restructure. We are glad to remain available as a home energy service group to support our customers and provide maintenance and repair for home systems that have been orphaned by other company closures.
We recognize your frustration with this news and never intended for our beloved 24-year-old residential solar business to curtail its offerings.