The Investment Tax Credit (ITC)
Businesses can claim a federal tax credit for their solar panel installation through the ITC. The same declining schedule that applies to homeowners also applies to businesses, with a credit worth 26% of the total system cost available in 2021 and 2022 and a reduction to 22% in 2023. However, the ITC is never set to expire for businesses. Instead, it will remain at a permanent rate of 10% for commercial solar from 2024 onwards, unless the solar tax credit is extended again.
For commercial solar energy installations to be eligible, the project only needs to commence construction or meet a 5% safe harbor rule to qualify for the tax credit value in the year the project started.
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