How Solar Investment Tax Credit (ITC) works?

Jaime Ventura
Aug 25, 2017 · 2 min read

This article regarding Solar ITC is perfect to let customers to learn more about this Federal benefit. Most of the complains we can read from customers that went to solar against solar companies are related with ITC issues coming for the typical misinformation provided by inexperienced solar consultants. First, please be aware that we are not Financial Advisers. Then, any doubt or concern about how to get the maximum benefit of the Solar ITC must be consulted with your Tax consultants. Second, every customer tax situation will determine if they are able to get 100% of this benefit and how long it can takes to get it completely.
In our example, both customers are able to get the ITC in the first year after going solar, but both customers present a different tax situation that will determine the final Cash Tax Refund. And this is the most important point of this example. In both cases, the customers are able to get 100% of the ITC benefits from IRS, so, in both cases, the final cost of the solar system after the ITC is gotten will be $21,000 ($30,000-$9,000). In both cases, for Return of Investment (ROI) calculation purposes, the amount of the Investment is the same, again, $21,000. What is different is how much money will be refunded by the IRS as cash to the customer and it will depend of the individual tax deductions during the year and the tax liability. So, one thing is how much cash you can receive from IRS as tax refund and other is how much ITC you will get from your solar investment. Please do not get confused. It does not matter if you used part of the total ITC to pay your liabilities. At the end, it is money that you are getting from the IRS as benefits from your solar investment. If you do not have a solar investment, you must need to take this money from your own pocket to overcome your liabilities. But when going Solar, you are using the ITC benefits to avoid paying your liabilities to the IRS using your own money.

Jaime Ventura. +1–747–400.9687. jventura.smartsolar4all@gmail.com

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