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Solar and the Investment Tax Credit

January 16, 2020

Over the past few months, Coloradans-and Americans in general-have been inundated with political advertisements that finally culminated with midterm elections. No matter your political affiliation, it is obvious that the legislators we elect into office and the policies they create impact us all.

One policy in particular that has had a profound effect on the Solar Industry over the past nine years is the Investment Tax Credit (ITC).

This tax credit—which revolutionized access to solar—began in 2005 with the Energy Policy Act. The Bi-Partisan act…that’s right, BI-PARTISAN…gave new commercial solar projects and residential solar projects a tax credit for 30% of their system’s cost. This opened up the possibility of solar to a whole new market of homeowners and businesses. Luckily, this year-long tax credit was extended for another twelve months with the Tax Relief and HealthCare Act in 2006.

This was a very crucial time for the little tax credit that could. The Solar Industry actually doubled during the extension, which then lead to Congress allowing the ITC to continue for another eight years in 2008.

Primarily due to the ITC, alongside decreasing equipment prices, the Solar Industry grew by 3,000% from 2006 to present day. According to SEIA (Solar Energy Industries Association), the number of Solar employees has almost increased by tenfold since 2005 and the US has installed more solar in the last year than has been installed in the previous 30 (via.).

The ITC has clearly created exponential growth within the Solar Industry. However, with the current expiration date of the tax credit looming in 2016 (where it will drop to 10% if it is not extended), there is a sense of an impending “cliff”. This uncertainty has the potential to cause a sense of urgency for solar projects in the coming year. With residential and commercial projects trying to get their systems completed before the deadline, will there be equipment shortages? Will prices increase as demand increases? Is there enough man power to complete all of this prospective work?

A very clear solution to these potential issues would be for Congress to extend the ITC. Solar is a booming industry and decreasing the current 30% tax credit to only 10% would be a crushing blow. It would exclude many individuals and business that could not make up that 20% difference. Supporting Solar is not only about combating climate change and minimizing our carbon emissions—which of course is an extremely important reason why we do what we do—but it is also about investing in small local businesses, which most Solar companies are. Solar has the potential to significantly change the way we create energy on a larger scale in America, but its future hinges on the decisions of our elected officials in Washington.

If you feel passionately about supporting the Solar Industry (which we really hope you do!), remind your Representative to extend the ITC.

And if you want to avoid falling over the “cliff”, contact one of our Solar Consultants at (970) 963-1420 or

Kelsey Gibb
Administrative Assistant and Rebate Specialist