L R AS Published on Monday 11 January 2021 - n° 345 - Categories:US policy, the American PV
Extension of the 26% U.S. federal tax credit for two years
On 22 December, the US Congress adopted a $90 billion Covid 19 stimulus package and a two-year extension of the 26% Solar Investment Tax Credit (SITC) for solar projects.
whose construction begins in 2021 and 2022. The tax credit will be reduced to 22% in 2023 and to 10% in 2024 for commercial projects. Residential projects will no longer be eligible for this credit. Projects must be commissioned before the end of 2025 to benefit from it.
U.S. demand looks promising with the extension of the tax credit.
The tax credit is one of the main drivers of solar energy growth in the U.S. market. Eligibility for the tax credit is based on the "start of construction" principle. Projects that are not commissioned within a certain period of time are not eligible for the credit. This mechanism has supported the growth of solar energy in the United States in recent years.
The commissioning of projects will take place from the end of 2023 to the end of 2025. It should provide an incentive for developers to invest in the U.S. market, thereby supporting the long-term growth of solar energy.
The US market was expected to enter a transition period in 2024 after the end of the 2023 commissioning period under the old regime. With the extension of the tax credit for an additional two years, PV InfoLink forecasts increased demand in 2024 and 2025, meaning that the US market will grow from 2021 to 2025. In addition, as each state strives to achieve carbon neutrality, the demand for panels in the US could exceed 30 GW in 2024 and peak in 2025.
.JPG)
PV InfoLink of December 24th
