Solar tax credits now available to tax-exempt entities
Recent guidance from the federal government clarified how entities that are not required to pay federal income tax can benefit from these tax credits on solar and other projects.
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Recent guidance from the federal government clarified how entities that are not required to pay federal income tax can benefit from these tax credits on solar and other projects.
With the solar ITC scheduled to fade beginning mid-2026, but storage credits remaining steady, businesses that act now can capture the full 30% benefit across both solar and storage.
Explore key federal and state tax issues in solar energy projects, including Investment Tax Credits (ITC), depreciation, and ownership structuring. Stay informed on the latest tax incentives and compliance
Typical exemptions or exclusions available for BESS vary by state and may be based on: if BESS co-locates with a solar or wind facility in a state that provides an exclusion or exemption for a
For entities claiming the ITC through elective pay (such as tax-exempt or governmental entities), IRS regulations provide rules that may allow a project to be financed with tax-exempt grants or forgivable
The Investment Tax Credit (ITC) is currently a 30 percent federal tax credit claimed against the tax liability of residential (under Section 25D) and commercial and utility (under Section 48) investors in
Tax-exempt and governmental entities, such as state and local governments, Tribes, religious organizations, and non-profits may install energy-generation and storage property to meet energy
New guidance from the Treasury Department and IRS was recently released for tax-exempt businesses to implement solar and storage projects, reinforcing the expanded opportunities
Generally, if the solar PV system is used by a tax-exempt entity such as a school, municipal utility, government agency, or charity, the ITC may not be claimed.
In essence, the Act enables tax-exempt entities to claim energy incentives including solar, wind, combined heat and power, and many others, through the direct pay mechanism that
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