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Federal Solar Tax Credits for Businesses

There are two tax credits available for businesses, nonprofits, and local and tribal governments that purchase solar energy systems.

The two tax credits available for businesses, nonprofits, and local and tribal governments that purchase solar energy systems are the investment tax credit (ITC) and the production tax credit (PTC). The ITC is a tax credit that reduces the federal income tax liability for a percentage of the cost of a solar system that is installed during the tax year and the PTC is a per kilowatt-hour (kWh) tax credit for electricity generated by solar and other qualifying technologies for the first 10 years of a system’s operation. It reduces the federal income tax liability and is adjusted annually for inflation.

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