The future just got brighter for solar energy in Texas, thanks to the recent extension of the federal solar Investment Tax Credit (ITC). Homeowners, businesses and schools in Texas now have another tool available to them in their efforts to make the switch to clean power and save some money in the long run.
The ITC allows for a 30% tax credit for residential solar installation, and up to a 30% tax credit, as well as additional tax benefits for commercial and industrial customers. This is a powerful incentive for homeowners and businesses considering going solar. Since its original implementation in 2006, the ITC has helped to grow annual solar installation nationally by more than 1,600%.
With ample sunshine, a business-friendly environment and multiple avenues to craft long-term leases for the necessary infrastructure, Texas is poised to break out of its solar doldrums and position itself as an industry leader. The extension of the ITC adds another incentivizing piece to this puzzle, upping the attractiveness for solar producers to invest in Texas and tap into a rapidly growing market.
Additionally, it offers a reassuring certainty for companies eyeing long-term investments in solar energy, which can spur innovation and ultimately drive costs down for consumers.
For homeowners that buy solar systems, the ITC provides a dollar-for-dollar reduction in their federal income tax, resulting in savings of up to 30% of the cost of infrastructure with construction beginning before Dec. 31, 2020 and slightly reduced tax credits for projects beginning construction in 2021. As a result, the impetus is on homeowners to invest sooner than later to ensure the savings collected from the ITC can be redirected to help pay down the cost of the lease of the solar panels and other required infrastructure.
Businesses and homeowners that don't have the funds to purchase their systems outright and choose to finance their systems with a lease or power purchase agreement (PPA) will still receive the benefit of these extended ITC benefits. The entity who finances their solar systems will monetize these extended tax benefits and pass the savings along to them in the form of reduced monthly financing payments.
Texas residents can find additional savings with MP2’s net metering and buyback programs, which are the first of its kind in the state. Most electricity providers set limits or offer no benefits at all on solar energy produced at one’s house, resulting in customers missing out on potential compensation for unused power.
As a result, in months where production is high and consumption is low, they can carryover excess credits to the next month to lower their bill. When paired with the savings delivered through the ITC, the barriers to solar installation simply fall away.
It’s these types of policies which can push prices down and drive demand up, and that will help make Texas the nation’s leader for solar.
If you’re thinking about going solar, now is the time! Prices are competitive, and the longer you wait, you miss out on the hedge and three years of benefit.
When you’re looking at solar energy companies that are well-positioned to help their customers take advantage, look no further than MP2 Energy. MP2’s programs will help customers take advantage of solar in a myriad of ways. To learn more, visit http://mp2energy.com/solar.