For the past 10 years the entire solar industry has been preparing for the 30% federal tax credit (ITC) on photovoltaic solar systems to start decreasing in 2020. The 30% credit (not deduction, but dollar-for-dollar credit) has allowed the solar industry to grow by 10,000% since its enactment in 2006. In fact, “solar photovoltaic installer” was listed as the fastest growing job by by Bureau of Labor statistics followed closely by wind turbine service technician. Check it out:
The end of the ITC was thought be be the end of that growth. Over 3 millions homes and businesses have taken advantage of the tax credit, and what would it do to the market if the credit disappeared? The return-on-investment reduces dramatically. Here at We Build SD, we see average ROIs of 16-18% for typical residential installations. With out the ITC, that
ROI drops to 10-12%. Now that’s still a good return compared to what you would get if your money sat in a bank, but consumers may decide there’s not enough incentive to install large panes of glass on their roofs for the return on their money.
But, there’s hope. As of last week, representatives in congress introduced the Renewable Energy Extension Act, HR 3961 in the House and S 2289 in the Senate. This bill presents a five year extension of the 30% ITC which is a huge win for consumers and solar installers. The bill is currently at the Ways and Means committee under review. You can follow along with the progress here:
There’s no guarantee that this will cross the finish line before midnight December 31st, so if you’re on the fence about solar, now’s the time to let us take a look at your SDG&E bill and see if the numbers work for you.