It’s better to seize the 30% Federal Tax Credit rather than wait for new solar-friendly legislation.
There was a brief period on the west coast of America when the future of solar-legislation looked bright.
California was on the brink of passing a Solar Bill of Rights (SB 288), shielding solar and storage customers against any future discriminatory fees. Oregon was teed up to enact a statewide cap-and-trade bill (HB 2020), taxing carbon emissions and other pollutants, and Washington was ready to give a straight-forward investment tax credit to homeowners that installed solar systems.
As the dust now settles from the combative legislative arena of 2019, however, it’s clear that only remnants of each west coast state’s high-hopes remain.
“What’s behind the meter is the customer’s own business,” said Brad Heavner, policy director at California Solar & Storage Association about Californias SB 288 at the beginning of the year. “If I want to generate and store my own power, you can’t force me to buy power from the utility.”
The statement seems straight forward enough. If you make energy, you should be able to profit from it. But it’s an idea that California utility companies didn’t like since it would be an outright attack on their profits. Their pitch? Paying fees to ratepayers with solar systems wasn’t fair to the rest of their customer base. Never mind that encouraging such policies would help mitigate their centralized grid-load and reduce the impact of rolling blackouts or fire-hazards. The long-term effects of a residential solar trend would cut into their profits and therefore, couldn’t be good.
California’s SB 288 had the support of more than 70 organizations, but after emerging through the state senate, it now makes no mention of solar, storage utilities, or energy.
The story follows a similar arc in the neighboring state of Oregon. HB 2020 was poised to be the state’s first carbon pricing program to ever pass through the House. But then it got to the Senate, spurring republican senators to stage a nine-day walkout until state police were deployed to bring them back into session. On June 29, 2019, Oregon’s Senate put the bill to rest.
The state of Washington’s case had a bit more of a happy ending. This time the bill in question was SB 5939, and it extended the state’s investment tax credit from 2017 to 2021. Legislators complicated the bill, however, deeming it necessary to require new solar modules to have a “takeback” plan submitted to the state’s Department of Ecology before they can be sold, thereby increasing the cost of materials.
It remains true to claim that perhaps one of the best solar incentive programs ever created with the Federal Solar Tax Credit, which was enacted in 2005 and will begin expiring at the end of this year. The generous credit allows homeowners that install solar before 2020 to deduct up to 30% of the cost on their taxes for up to two years. That means if the deduction causes your taxes to balance at $0 for the first year, you can rollover the additional credits into the second.
When the new year bell tolls in 2020, however, all that is set to come to an end. The Federal credit will diminish to 26 percent in 2020, 22 percent in 2021, 10 percent in 2022, and then disappear entirely.
Those who decide to stick around waiting — hoping — for their state legislators to come through and make converting to solar more profitable than it already is, might be left waiting a long time. After all, 26 percent is still better than nothing.
Want to try and lock in the 30 percent federal solar tax credit before it decreases? The experts at Go Green Solar can help! Call (866) 798-4435 for more information.