Federal Solar ITC Included in New Recovery Bill

by Bobby Monacella of Ipsun Solar

This week House Democrats introduced the Moving Forward Act, a sweeping $1.5 trillion package to support long-term economic growth in response to COVID-19. We are so happy to see that the package includes our stated priorities:

• A five year extension of the federal solar investment tax credit at 30%
• The ability to take 85% of the tax credit as a direct pay option up front.

Just these two changes would make a world of difference for the solar industry, job growth, and most important to us, solar customers who want to join the renewable energy movement. Even better, we’re thrilled to see there is so much more included, like solar grants for underserved communities and funds for solar on schools.

The provisions we’ve been asking for

The solar provisions in this legislation are critical to the goal of rebuilding an equitable, sustainable new economy and society. This package includes many more key energy tax policies and infrastructure proposals that would directly benefit solar, some of which are highlighted below:

• 5-year extension of Sec. 48 and 25D of the Investment Tax Credit (ITC) at 30% through 2025, followed by a two-year phase-down (2026 at 26% and 2027 at 22%)
• Direct pay proposal at 85% for section 48 qualifying projects for the same amount of time as the PTC/ITC credits exist
• Storage ITC
• Proposals to incentivize investment in clean energy for low income and underserved communities
• Tax credits for clean energy manufacturing
• Grid modernization provisions
• Funds for transmission planning with a requirement to account for renewable energy generation
• Grant program for solar installation in low-income and underserved communities
• Funds for renewable energy installation in community institutions, such as schools
• Improvements to public lands renewable energy development programs, similar to SEIA-supported H.R. 3794

We still have our work cut out for us

The introduction of this bill is very encouraging, but our work to ensure pro-solar policies are signed into law has really just begun. This bill is a starting point to a complicated negotiating process involving Senate Republicans and the White House. As such, much in this Democratic-sponsored legislation is likely to change.

The fact that many solar priorities are included in this COVID-19 recovery package is in itself a huge accomplishment, one that the Ipsun tribe has been working toward for a long time. But we can’t rest on our laurels. Now it’s time for everyone who cares about solar, about rebuilding better, and about making the playing field more equitable, to speak up again and often.

Write your legislators today!

Please send your Senators and Congresspeople a note letting them know that this is important to you! You can find the names and contact information for your congresspeople here, and your senators here.