Congress passes a massive spending bill — extends the solar Investment Tax Credit for two years

The U.S Congress has passed a massive USD $900 billion COVID package.

The spending bill includes USD $35 billion in funding for energy research and development programs and contains important emergency relief measures for the solar energy industry.

The relief measure, in question, is a two-year extension of the investment tax credit (ITC).

The two-year extension will retain the current 26 percent credit for projects that begin construction through the end of 2022, instead of expiring at the end of 2020.

The ITC will decrease to a 22 percent rate for projects that begin construction by the end of 2023 and then drop to 10 percent for large-scale solar projects and to zero percent for small scale solar projects in 2024.

The bill also has funding for distributed energy deployment as well as support to provide better access to federal lands for renewable projects.

Originally established by the Energy Policy Act of 2005, the investment tax credit (ITC) allows those who install solar panels to deduct an allocated percentage of the cost from their federal taxes.

The ITC applies to both residential and commercial systems, and there is no cap on its value.