Solar Tax Credits Under Threat in 2024

As we approach the tax deadline for 2023 returns, the feeling in California is that it could be the last time tax incentives up to 40% will be available to businesses wanting to go solar. 

The 2024 presidential election is expected to once again throw the spotlight on energy sources and the political hot potato of renewable energy subsidies. 

Currently, businesses in California qualify for:

• 30% Investment Tax Credit (ITC)

• 10% Energy Community Bonus Tax Credit (for large parts of the state) 

Throw in additional incentives such as asset depreciation and the tax discount on a commercial solar system can be as great as 77%. 
 

The ITC was reinstated to 30% and the Energy Community Bonus Tax Credit was introduced as part of the Inflation Reduction Act in 2022. 
 

This legislation created controversy among Republicans and Democrats and it is expected once again to be the target for political point-scoring, raising questions over future levels of the tax credits as soon as next year. 
 

We expect that the 10% bonus credit will be removed and the ITC will be reduced should Republicans regain power, meaning this year would be the last time tax discounts of this level would be available for at least a few years.
 

So our message for 2024 is that it could be the last time solar tax incentives are at the current level and if reducing costs and emissions is still important to you, time is of the essence.