Tax Credit Goes Down = Net Price Goes Up in 2020
So the tax credit will decrease in percentage value next year — but how will that impact the net price of solar? Over the last 6 months, our average home solar system has been around 8 kilowatts in size and cost roughly $24,500 fully installed, before any incentives. After accounting for the 30% Solar ITC in 2019, the cost for the system owner would drop by $7,350 to $17,150. For the same system in 2020, the Solar ITC will reduce the cost by $6,370 to $18,130 — a net increase in price of almost $1,000.
Because there is no cap on the amount you can claim via the Solar ITC, the dollar value lost between 2019 and 2020 only gets larger as a solar system’s price increases. For a 100 kilowatt commercial solar system priced at $220,000, the value of the credit is $66,000 in 2019 vs $57,200 in 2020 — a negative swing of close to $9,000.