Finance & Tax
The availability of low-cost financing for solar energy projects is a critical issue for the industry. SEIA monitors regulations and legislation that affect the markets for solar financing, and supports a number of specific programs that facilitate solar development. The U.S. also has a long history of supporting energy infrastructure through the U.S. tax code, and the market certainty provided by the long-term solar investment tax credit (ITC) has supported hundreds of thousands of U.S. jobs.
Solar Investment Tax Credit
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. Since the ITC was enacted in 2006, the U.S. solar industry has grown by more than 10,000%. In 2015, SEIA successfully advocated for a multi-year extension of the credit, which has provided critical stability for businesses and investors.
Quick Facts about the ITC
- The ITC is a 26 percent tax credit for solar systems on residential (under Section 25D) and commercial (under Section 48) properties.
- The residential and commercial solar ITC has helped the U.S. solar industry grow by more than 10,000% percent since it was implemented in 2006, with an average annual growth of 50% over the last decade alone.
- Congress passed a multi-year extension of the ITC in 2015, but the credit began stepping down at the end of 2019.
Finance Programs
SEIA has a variety of initiatives on financing designed to facilitate industry coordination and promote outreach to current and potential stakeholders. Our goal is to improve comprehension, ease financing complexity, and spur capital formation and project development.
About SEIA's Finance Work
SEIA convenes several committees and working groups to conduct research, develop educational materials, and organize the various facets of the solar energy finance industry. SEIA also organizes conferences, webinars and other forums for stakeholder engagement and industry participation. In January 2017, SEIA merged with Solar Energy Finance Association (SEFA) to provide the solar industry a single and consistent voice to the investment community.
Third-Party Solar Financing
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The U.S. has a long history of supporting energy infrastructure through the U.S. tax code. The market certainty provided by a long-term investment tax credit (ITC) for solar energy has supported private investment in manufacturing and project construction, a vital part in meeting our nation's energy policy goals, driving cost-cutting innovation and job growth.
Related News
New IRS Safe Harbor Notice Provides Needed Relief and Clarity for Solar Companies
WASHINGTON D.C. — Today the Internal Revenue Service (IRS) released a new notice that extends safe harbor for solar projects under the Section 48 Investment Tax Credit (ITC). Notice 2021-41 extends the safe harbor rules under IRS Notice 2018-59 from four years to six years for projects that started construction from 2016-2019, and from four years to five years for projects that started construction during 2020.
Solar Leases in South Carolina Get Property Tax Exemption
COLUMBIA, SC and WASHINGTON, D.C. — Last week, South Carolina’s state legislature passed H. 3354, which exempts leased and third party owned residential solar systems from property taxes. This exemption is already in place for solar customers that own their systems. The new legislation puts all solar customers on equal footing when it comes to tax treatment.
West Virginia Enables Solar Power Purchase Agreements
WASHINGTON, D.C. - The West Virginia legislature has passed a bill to make it easier for West Virginians to benefit from solar energy. House Bill 3310 enables power purchase agreements (PPAs). PPAs are a widely available method to finance distributed energy generation projects such as rooftop solar panels. PPAs are now allowed in 29 states.