The commercial solar tax credit remains at 30%, but only for systems that begin construction by July 4, 2026, or are placed in service by the end of 2027. These timelines are now tighter than anticipated, increasing the pressure on developers to act fast.
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To discover the incentives, grants, and rebates available to offset the cost of installing a solar PV system for your home or business, as well as other types of renewable systems, we suggest you start with consulting with ECG Solar™; our extensive experience and knowledge of these programs can help identify applicable incentive programs for you.
Note: We do not offer CPA or investment advice and consulting, so we suggest you confer with your own professional to confirm how these incentives will impact your project and financial portfolio.
The 30% base, up to 50% tax credit for commercial projects has been extended and will be available through the end of 2027. This includes projects that are part of third-party ownership arrangements, such as leases and Power Purchase Agreements (PPAs).
A tax credit is an amount of money that taxpayers can subtract directly from the taxes they owe. Unlike deductions, which lower the amount of taxable income, tax credits reduce the actual amount of tax owed. A tax credit is a dollar-for-dollar reduction in the amount of income tax you would otherwise owe. For example, claiming a $1,000 federal tax credit reduces your federal income taxes due by $1,000.
Disclaimer: ECG Solar provides an overview of the federal investment tax credit for solar photovoltaics (PV) and battery systems. It does not constitute professional tax advice or other professional financial guidance. And it should not be used as the only source of information when making purchasing decisions, investment decisions, tax decisions, or when executing other binding agreements.
In order to claim a federal tax credit, the solar energy system must be in service during the tax year and generate electricity for a home within the United States. There are many stipulations that should be gone through and examined, the links to which can be found below.
30% Investment Tax Credit (ITC) , no cap on project cost, no refunds and does not qualify or IRA direct pay program. This Tax credit is still available until 2027.
The 30% tax credit for homeowners has been changed to expire on December 31, 2025. To be eligible, the solar system must be “placed in service” (fully installed) by this date. This is a change from the previous law, which had extended the credit through 2034.
Taxable entities may transfer any applicable credit to another taxpayer. Transfer may be all or a portion of the credit within 3 years and transferred only once. See section 13801 of the tax bill for more details.
Third-party-owned (TPO) residential systems are financed and receive the ITC via the business tax code. For details on the business ITC, see the next section. As before, a system is directly owned by an individual taxpayer and claims the personal tax credit or is TPO and has the tax credit claimed by the third-party owner, not both.
Extended at 30% through 2032; beginning with property placed in service after 2022, lifetime cap replaced with an annual cap of $1,200 except for heat pumps, heat pump water heaters, biomass stoves and biomass boilers which are capped at $2,000 in aggregate. Credit also applies to improvement to or replacement of a panelboard, sub-panelboard, branch circuits or feeders that have capacity of at least 200 amps and are installed to enable the “installation or use” other eligible property under this Section 25C.
30% Investment Tax Credit (ITC) up to $1,000.00, no refunds and does not qualify or IRA direct pay program. Carries over for 7 years if cannot be used all at once. Drops to 26% in 2033, 22% in 2034 and 0% in 2035.
30% Investment Tax Credit (ITC) up to $100,000.00 per charger, no refunds and does not qualify or IRA direct pay program. Carries over for 7 years if cannot be used all at once. Drops to 26% in 2033, 22% in 2034 and 0% in 2035.
The IRA provides $4.3 billion to State Energy Offices to establish rebates for a variety of home energy upgrades under the Home Owner Managing Energy Savings (HOMES) rebate program. Rebates for home energy retrofits up to the lesser $8,000 per home or 80% of project cost if the project saves at least 35%. Lesser amounts available if projects save less than 35%. Multi-family rebates are also supported with different rebate amounts. Caps can increase for low- and moderate-income families with approval of the Secretary. Cannot be combined with High-Efficiency Electric Home Rebate Program.
30% Investment Tax Credit (ITC) for 3 kWh capacity or larger and can charge from any source, no cap on project cost, no refunds and does not qualify or IRA direct pay program. Carries over for 7 years if cannot be used all at once. Drops to 26% in 2033, 22% in 2034 and 0% in 2035.
The business investment tax credit is extended and lifted to 30% for projects that have started or start construction before the end of 2024 and the credit becomes available to stand-alone storage. Solar also becomes eligible for the production tax credit which is currently at $0.026/kWh for 2022 and rises with inflation. After 2024, the credit transitions to a “tech neutral” structure.
Under the IRA, projects will be able to choose the ITC or PTC. Both credits come with potential adders for meeting certain domestic content requirements, locating in energy communities, or allocated credits for being on qualified low-income property. The level of the base credits and adders are shown in the tables below. Stand-alone storage is eligible only for the ITC. Both ITC and PTC credits become transferable. The ITC becomes available for costs of interconnection for projects with a net output of less than 5 MWac. Direct pay becomes available for state and tribal governments, Alaska native corporations, certain tax-exempt entities and rural cooperatives. All timelines below are subject to specific placed-in-service and start-construction deadlines and documentation requirements.
Now, tax-exempt organizations like public schools, cities and nonprofits can get those credits by direct pay, and receive a check for up to 50% of the project cost, just like a tax-paying entity would receive the credit when filing taxes. Direct pay paves the way for organizations to own solar projects instead of just buying the power through PPAs. Although the industry is awaiting official guidance from the Treasury Department regarding the logistics of direct pay and other IRA provisions, the basic qualifying factors are spelled out in the statute. Here are the entities that can access direct pay for the solar ITC.
Any organization that has filed an application with the federal government for tax-exempt status will qualify for direct pay. This could include state colleges and universities, nonprofit organizations and more. It excludes homeowners’ associations (HOAs).
Any governmental entities can receive direct pay for the solar ITC. This includes public schools, colleges, universities, city, county, state owned buildings.
Rural electric Co-ops now qualify for direct pay, allowing them to own their solar projects and receive credits directly.
The Tennessee Valley Authority is a federally owned electric utility corporation that can now receive direct pay for solar projects.
Currently Iowa no longer offers a state level tax credit, rebate or cash incentive on any Solar, Battery, EV’s, EV Chargers or energy improvements. Iowa excepts sales tax on all renewable energy projects Iowa Code 423.3 as well as Property Tax Exemption for Renewable Energy Systems per Iowa Code 441.21(8). Additional laws are also in place such as Net-Metering under Iowa Code 199.15.11(5) and Iowa Solar Easement and Access Laws under Iowa Code 564A.
Currently we are not aware of any cash incentives or rebates offered by any one of the publicly traded companies such as Mid-American Energy or Allaint Energy for renewable energy projects. Please contact your electrical provider by phone or web site to discover any new programs they may offer. You can also use the DSIRE web site to search for other such programs. (https://www.dsireusa.org/)
The IRA establishes two credits for manufacturers; 1. A 30% investment tax credit (Section 48C) for eligible investment costs in facilities and equipment and 2. A manufacturing production credit for certain components based on the volume of product manufactured. Manufacturers can only seek to take one or the other; that is, a manufacturer cannot claim the investment credit and then claim the production credit for product from the same factory. Ten billion dollars are allocated for the Section 48C tax credits, and up to six billion dollars can go to projects located outside of census tracts (or adjacent tracts) where a coal mine closed after 1999 or a coal-fired power plant was retired after 2009. To receive the full 30% credit, a project must meet prevailing wage and apprenticeship requirements Otherwise, the credit will be six percent. There is also no direct pay option, with limited exceptions, and manufacturers must apply and be chosen for the Section 48C tax credit. Credits are based on application and award process.
The IRA contains many other provisions important to the energy transition of direct or indirect interest to the solar energy and energy storage industries, including the provisions listed here:
ECG Solar™ has been Iowa’s Premier Solar Provider™ of energy storage & production systems since its founding in 2008. For over a decade, we have been a leading supplier of solar panels and energy-efficient systems available. We carry some of the finest products, from Kohler™ standby generators to Enphase™ battery systems. With ECG Solar™, you can rest assured that you’re receiving top-notch solar conversion services that will help you save money on your electric bill.
We offer premium solar installation services, tax credit resources, basic mechanical information, and more. ECG is here to provide you with all the help you need to make the best solar decision for you.
9.08687 GWh
Clean energy produced
6,541,673.30
Metric tons of CO2 offset
16,237,777,839
Equivalent vehicle miles avoided
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