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ARTICLE · 16 AUGUST 2018

IRS Issues New Guidance On Rules For ITC Qualification

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The Investment Tax Credit for Solar Power (the "ITC") is a tax credit offered to individuals and businesses based on the amount they invest in eligible solar energy conversion facilities.

United StatesEnergy and Natural Resources
Joshua E. Porte
Joshua E. Porte
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The Investment Tax Credit for Solar Power (the "ITC") is a tax credit offered to individuals and businesses based on the amount they invest in eligible solar energy conversion facilities. The benefits of the ITC have been extensive enough to warrant the extension of the program on multiple occasions. The latest expansion, adopted in 2015, is expected to spur as much as $140 billion in the economy and double U.S. solar power employment by 2020. Such expansion will assist states in meeting their ever-increasing renewable portfolio standards and replacing fossil fuel generation.

The deduction percentage that taxpayers receive through the ITC program depends on when they begin the construction of their energy projects. Commercial and utility projects that "commenced construction" through 2019 are eligible to receive a 30% ITC credit. The percentage then drops down to 26% for projects that begin construction in 2020, and, then, to 22% for projects that begin construction

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