A recent IRS ruling is making headlines around the solar industry, as it spells outstanding news for developers and those who wish to invest in clean, renewable solar energy. The announcement: the IRS is extending solar power and other clean-energy incentives for another four years!
The announcement came as somewhat of a surprise to the industry, considering the other not-so-great news that has been coming our way, notably the tariffs on imported panels. While SunPower is based right here in the USA, other companies have been worried that the tariffs on imported solar panels will drive the price on their panels too high.
That’s no longer a problem, and we’ll explain why. Thanks to this new announcement, developers can claim up to 30 percent of the cost of their solar project as long as they can prove that they have started their construction project through the end of 2019. Starting the project includes either breaking ground, or investing at least five percent of the total cost of the installation. The developer would then have until 2023 to complete the project and receive the full 30% credit.
Projects that begin on January 1st, 2020 or later will receive up to 26 percent of their cost as a credit, with the amount dropping further year by year after that.
Avoiding the Tariffs
How does this help developers avoid tariffs? Simple: all a developer needs to do is break ground on a project before the end of the 2019 year in order to lock-in the rate. From there, they’ll have four more years to complete the project. During that four-year stretch, the tariffs instituted on imported solar panels will expire (which they do at the end of 2021).
This means that solar developers can then purchase their panels at a date after the tariffs expire, keeping their prices lower, and still qualify for this maximum tax credit.
Additionally we will find that larger solar installations will become more affordable and the solar industry will continue to thrive for many additional years, even when tariffs threaten to raise the price of an average system substantially!
To learn more about switching your home or business over to clean, renewable solar power, call Sea Bright Solar at (732) 253-4052 and speak with one of our solar experts!