Contact UsIt is my understanding that under the current statute, solar based energy projects must be placed in service by the end of 2016 in order to qualify for the Investment Tax Credit (ITC). However, a CPA colleague of mine had mentioned that it was his understanding that the statute was being revised. Can someone please clarify this for me and provide some additional insight?
Tax Professional Answers
You are correct in that under the current statute, solar panels must be placed into service by the end of 2016 in order to qualify for the Investment Tax Credit (hereinafter "ITC"), which provides a tax incentive equivalent to either:
1) 30% of the initial cost of wind, solar, and fuel cell systems; or
2) 10% of the cost of geothermal, microturbine and so-called combined heat and power systems.
You are also correct in that the bipartisan U.S. Senate bill will attempt to allow solar energy projects to collect the ITC as long as construction commences before the credit expires in 2017 which would provide a much needed extension for large-scale solar panel developers heavily reliant upon the federal subsidy and allow far more projects to qualify for this advantageous energy tax incentive.
As a caveat, this is merely proposed bipartisan legislation and not law as of this writing.
Please feel free to contact me should you have any further inquires.