Unlike fleeting trends that come and go with the seasons, solar energy remains a steadfast environmental and financial investment. And while every year is a good year to go solar in terms of reducing our carbon footprint, 2019 is shaping up to be a particularly bright year for solar power. From federal tax incentives to local energy goals, there are many factors making this year especially important for those considering solar.
Last Year of the 30% Federal Solar Tax Credit
While the most beneficial aspect of going solar is reducing our environmental impact, it is of course important to evaluate its financial viability as well. The Federal Solar Tax Credit, also known as the Investment Tax Credit (ITC), has made solar panel installation for homes and businesses much more affordable. The ITC allows solar system owners to claim 30% of the total cost of their solar system installation as a credit on their federal taxes, effectively saving property owners thousands on their solar projects. This credit includes the comprehensive costs of solar installation, including roof work, electrical panel upgrades, permitting, and interconnection with the utility.
The ITC was originally established in 2005, and it has since received a series of extensions that have helped the United States invest in solar energy. Home and business owners have been benefiting from the solar tax credit for more than a decade, but unfortunately all good things must come to an end. Starting in 2020, the ITC will begin to step down.
The Federal Solar Tax Credit will remain at the full 30% of the total installation cost throughout 2019. In 2020 the credit will drop down to 26%, and in 2021 it will drop to 22%. 2021 will be the last year for residential solar systems to receive the solar tax credit. Beginning in 2022, commercial solar systems will only be able to deduct 10% of their system cost from their federal taxes.
Despite this change, solar systems will not suddenly lose their profitability for residential buyers. Going solar will still save you money in the long run as most equipment is warrantied for 25 years and can last 30 years or more- plus it will reduce your carbon footprint from day 1!
Greener Building Codes – Title 24
Every three years, the California Energy Commission (CEC) is responsible for updating the state’s Building Energy Efficiency Standards, or Title 24, with the intention of maximizing energy efficiency and reducing environmental impact. The new 2019 regulations have quite a few updates, the most notable being the requirement for new residential constructions to have solar photovoltaic systems.
For the first time in U.S. history, a state is mandating virtually all new residential buildings to offset a portion of their energy consumption with renewable energy. With California having the biggest solar industry in the country it makes sense to implement this groundbreaking regulation here. According to Title 24, homes built under the new 2019 regulations will use 53% less energy than homes built under the previous regulations. In addition to the energy savings, these standards are expected to save homeowners approximately $19,000 in energy and maintenance costs over 30 years. These new energy-efficient building regulations will be adopted under Title 24, Part 6 of the California Code of Regulations, and they will be effective as of January 1st, 2020. If you are planning to start a new construction next year, you will be be one of the first in the country to take part in this groundbreaking environmental policy!
Local Climate Goals
California is once again stepping up as a leader in environmental policy: last year it passed bill SB 100 to set the goal of 100% renewable energy by 2045. This goal may seem overly ambitious to some, but in light of recent climate reports it is turning out to be more along the lines of the bare minimum. Achieving 100% renewable energy is a big commitment, but a necessary one. With new energy efficiency regulations such as Title 24, California is taking a step in the right direction.
The Central Coast is also taking action on climate at the local level: both the City of Santa Barbara and City of Goleta have committed to 100% renewable energy by 2030 and the City of Ventura has joined the Clean Power Alliance to make 100% renewable energy the default rate option of its residents. To kick off 2019, Santa Barbara Unified School District passed a climate change resolution to commit to climate education and installing solar panels on their schools.
We can also get involved at the grassroots level- from getting involved in local climate organizations to taking the initiative to install solar on our homes and businesses, we all have a chance to urge our communities to move away from our fossil fuel dependency.
Why This Matters
2019 is going to be a very important year for solar; the opportunities and environmental impacts are more prevalent than ever before. From an environmental perspective, the new Title 24 standards are going to help us achieve our goals of 100% renewable energy by 2045. Mandating new constructions to have solar PV systems is a huge environmental win, and it is also going to provide homeowners thousands in energy savings.
While we are hopeful of the possibility of new solar incentives, we cannot depend on the Federal Tax Credit being extended or replaced with another incentive program. Fortunately, the cost of solar systems has been continually decreasing as technology advances and the industry becomes mainstream. There are also financing options that make solar an option for families from all economic backgrounds- we are very much looking forward to a future where renewable energy is the standard, not a privilege.
Going solar at your home or business is a very rewarding investment, but there are more than just financial reasons to consider. We know the effect fossil fuels and greenhouse gas emissions are having on our planet- causing disastrous climate change and unjust public health issues in disadvantaged communities around the world. Ultimately, every solar panel installed brings us one step closer to our goal of a cleaner, greener future.