Investing in renewable energy for your home can be a great way to reduce your carbon footprint and save money on energy bills. But did you know that you may also be eligible for an annual residential clean energy tax credit? Projects that begin construction on or after January 1, 2025 are eligible for the § 48E Clean Electricity Investment Tax Credit (CEITC). This tax credit can be applied for in full for the year in which the solar system was put into service, but the company requesting the ITC must retain ownership of the system until the sixth year of operation or they will have to reimburse part of the tax credit. In addition to the CEITC, there are other federal tax incentives available for investing in renewable energy.
The federal production tax credit (PTC) program is mainly used for wind power projects and was first applied to installations put into service starting in 1994. The Investment Tax Credit (ITC) is a dollar-for-dollar credit for expenses invested in renewable energy properties, most often in solar developments. The Inflation Reduction Act also provides significant investment in clean energy through fiscal incentives. This will help catalyze historic levels of private investment in clean energy over the next decade, while supporting well-paying union jobs across the country. It's important to note that these tax incentives are loans to invest in the manufacture of renewable energy equipment, not for the generation of them.
Novogradac does not provide investment advice and the information that appears on the Novogradac website should not be interpreted as a recommendation to enter into a transaction with a particular party.
