U.S. President-elect Joe Biden has set four top Day One priorities for his incoming administration: combatting the coronavirus pandemic, restoring a faltering economy, creating the conditions for greater racial equality, and taking on the “existential threat” of climate change. Biden’s team identifies climate change as an existential threat not just to our environment, but also to our health, communities, national security and economic well-being. What does this mean for homeowners and the future of solar? While the 2020 presidential election created much division across the country, homeowners and energy experts agree that there are big and positive changes in the pipeline in regard to the future of solar energy.
Biden’s Solar Aspirations
The Biden-Harris team has lofty aspirations regarding the future of solar energy, including $2 trillion in spending over four years. As a result, that money would be leveraged for their long-term goals such as achieving 100 percent clean energy nationwide by 2035. In addition, other goals include:
- restricting oil and gas drilling on public lands and waters;
- ratcheting up federal mileage standards for cars and SUVs;
- blocking pipelines that transport fossil fuels across the country;
- mobilizing other nations to make deeper cuts in their own carbon emissions;
- increasing the number of EV charging stations across the country; and
- providing federal incentives to develop renewable power.
In short, the new administration wants to empower the clean energy sector to create jobs and decrease carbon emissions across the country. However, keep in mind these measures won’t magically come into place. For now, they still exist as proposals. Without the Democrats wielding a Senate majority, the president-elect will have to rely on a combination of executive actions and more-modest congressional deals to advance his agenda. While these ideas may seem to bear no impact on you, as a homeowner and someone interested in solar, this legislation could actually have quite an effect.
How Would This Affect Me?
For homeowners, arguably the most impactful policy proposed by the Biden administration is increased incentives for solar and battery technology.
For now, homeowners can take advantage of the investment tax credit (ITC), also known as the federal solar tax credit—the largest federal solar incentive program. However, this incentive program expires soon.
The History of the ITC
The ITC was originally established in 2006 by the Energy Policy Act of 2005. It was set to expire at the end of 2007. However, due to its popularity and success, Congress has extended the expiration date multiple times, decreasing the rebate percentage each time. Want to see a brief timeline of the ITC rates since 2016? Then take a look below.
- 2016 – 2019: The tax credit remains at 30 percent of the cost of the system.
- 2020: Owners of new residential and commercial solar can deduct 26 percent of the cost of the system from their taxes.
- 2021: Owners of new residential and commercial solar can deduct 22 percent of the cost of the system from their taxes.
What Happens After 2021?
After 2021, residential solar energy systems will no longer be eligible for any federal tax credit. Commercial solar systems can still deduct 10 percent of the cost of the system from their taxes. Under the Trump administration and Republican-controlled Senate, the likelihood of further expansion of these incentives seemed next-to-none. However, the Biden administration’s pledge to further expand on these incentives means continued savings for homeowners looking to go solar!
How Does The Solar Tax Credit Work?
Any homeowner who purchases a new residential solar system can qualify for the ITC. As the new administration begins to take over, the requirements may change; although, as of now, most homeowners qualify as eligible for the ITC. When you choose an installer like NRG Clean Power, you won’t have to worry about any of this, however. Our team of energy experts will work with you to find all of the solar incentives for which you qualify and ensure you get the best prices for your residential solar project.
Ready To Make The Switch To Solar?
The future of solar is now, and, although a Biden presidency could benefit homeowners, nothing is certain. The only thing we know for sure? The ITC expires soon, and an extension is not guaranteed.
Want to take advantage of the savings today? Then start by contacting one of our solar experts now!