Fed Tax Credit Grant Extended

Fed Tax Credit Grant for Commercial Solar Jobs Extended!

On December 17, President Obama signed into law the tax legislation that includes a one-year extension of the Federal Tax Credit Grant Program.

The successful program has allowed 1,100 solar projects in 42 states to move forward and supported $18 billion in investment. The program has been critical in allowing the solar industry to grow by over 100 percent in 2010, create enough new solar capacity to power 200,000 homes and provide work to more than 93,000 Americans.

The program was created by the American Recovery and Reinvestment Act (Section 1603) to provide commercial solar installations with a cash grant in lieu of the 30 percent solar investment tax credit (ITC). President George W. Bush signed the 8-year ITC into law in 2008, but the economic conditions created by the global recession made it clear that few would be able to utilize the tax credit.

In addition, a 100% depreciation bonus on new equipment placed in service after Sept. 8, 2010 has been approved. Instead of depreciating a project over the normal depreciation period, the entire cost could be deducted in the year the project goes into service.

The 100% depreciation bonus is equivalent to an additional 5.2% investment tax credit on a solar project. The 30% Federal Tax Credit for residential projects will remain in place for 2011.