Credit of ITC and PTC Intro

  • The solar Investment Tax Credit (ITC) is one of the most important federal policy mechanisms to support the growth of solar energy in the United States The ITC is a 30 percent tax credit for individuals installing solar systems on  residential property (under Section 25D of the tax code).
  • The Section 48 commercial credit can be applied to both customer-sited commercial solar systems and large-scale utility solar farms. The rate is effectively at 30% until Treasury issues guidance on new wage and apprenticeship standards. Two months later, the rate will be at 6%, with an additional 24% (for a total of 30%) available for meeting these new labor standards.
  • Commercial taxpayers may now also choose a Production Tax Credit (PTC) for solar instead of an ITC. The PTC rate is 1.5 cents (adjusted for inflation, it is presently 2.6 cents). The full value of the PTC is effective until Treasury issues guidance on new wage and apprenticeship standards. Two months later, the underlying rate will be at .3 cents, with an additional 1.2 cents (for a total of 1.5 cents) available for meeting labor standards.