The Federal Solar Investment Tax Credit (ITC) remains one of the most impactful incentives for expanding renewable energy adoption in the United States. Yet, despite its widespread use, there’s still plenty of misinformation about how it works, who qualifies, and how long it will be available. Clearing up these misconceptions is essential for homeowners, business owners, and developers who want to take full advantage of the benefits.
Below, we address three of the most common myths about the ITC and set the record straight.
Myth 1: The ITC Is a Rebate
Reality: The ITC is a tax credit—not a check from the government.
A rebate is cash that you receive after a purchase. The ITC, however, reduces the amount of federal income tax you owe. If you install a qualifying solar energy system, you can claim the credit on your federal tax return for a percentage of the project’s total cost, including equipment, labor, and installation. This credit directly offsets your tax liability, which can significantly lower your total tax bill.
Myth 2: Only Large Developers Benefit
Reality: Residential property owners and small businesses also qualify.
While the ITC has been instrumental for utility-scale solar developers, it is equally available to homeowners (Credit terminating for projects after 12/31/2025) and small business owners who install qualifying solar energy systems. Whether you’re adding panels to your home or investing in solar to reduce your business’s operating costs, the same percentage credit applies—making it a powerful savings opportunity regardless of project size.
Myth 3: There’s No Flexibility on Project Timelines
Reality: Projects that start construction by July 4, 2026, have four years after the start year to be placed in service to meet the continuity safe harbor.
This provision gives developers and owners a longer window to complete their projects without losing eligibility for the ITC. For projects that begin construction after July 4, 2026, the placed-in-service deadline shortens to December 31, 2027. Understanding these timelines is critical for planning—especially for larger or more complex projects that may face permitting, financing, or supply chain delays.
