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Investment Tax Credit Extended Through 2023 (and beyond)

The reason that Power Purchase Agreements (PPAs) have been attractive to solar customers, including school districts, and the investor community is because the federal government has offered the third party investor/developer a tax credit that can reduce the cost of a PV system. When the investor/developer is able to take advantange of the ITC, the savings can be passed along to the school district in the form of a lowered electrcity rate.

It is also now possible to apply the ITC to the purchase of battery storage systems that are installed to reduce demand charges, or discharge during peak pricing periods, or, in some cases, provide electricty to critical school electric circuits during a power outage. See, Federal Tax Incentives for Energy Storage Systems for more information.

Tax credit laws change over time, so be sure to check on the current status of the ITC before making a final commitment to purchase.

Check out the Guide to the Federal Investment Tax Credit for Commercial Solar Photovoltaics published by the US Department of Energy for a deeper dive into the ITC.

If you are contemplating a PPA for your school district be sure to have a consultant on board who is familiar with the ins and outs of the ITC.