Everything You Need to Know About the Future of the Solar Investment Tax Credit
The federal solar tax credit, also known as the investment tax credit (ITC), has long reigned as one of the best solar energy incentives in the United States. When it was first established, the ITC allowed homeowners and businesses to claim a federal tax credit worth 30% of the total cost of their solar installation. Though that number has since decreased, the ITC is still an incredible incentive that has led to an average 52% annual growth in the solar industry since it was enacted. The ITC has an impact on other industries as well—it offers incentives for geothermal and small-scale wind in addition to solar—making its extension an exciting prospect for the future of clean energy.
In our latest podcast episode, we discussed the current state of the ITC and its effect on content marketing strategy for solar energy companies. Since that episode aired, there have been some big changes to the ITC! Originally set to drop from its current level of 26% to 22% in 2021 and then expire altogether before the start of 2022, the federal solar tax credit has been extended, giving homeowners and businesses more time to save, and providing an excellent marketing opportunity for solar energy companies.
Here’s What the Current ITC Schedule Looks Like
The federal solar tax credit has been adjusted several times since its inception in 2006, with its first extension taking place in 2015. From the latest extension at the end of 2020, the ITC schedule looks like this:
2021-2022: Residential and commercial solar installations are eligible for a federal tax credit worth 26% of the system’s cost.
2023: The ITC will be reduced to 22% of the cost of solar installation for both residential and commercial systems.
2024: The federal solar tax credit will drop down to 10% for commercial systems—where it will remain indefinitely—and be eliminated entirely for residential systems.
What Does the ITC Extension Mean For Your Marketing Strategy?
This year, our recommended content marketing strategy for solar energy companies has been heavily focused on the impending ITC drop and eventual expiration, as the looming deadline gives potential buyers a sense of urgency and inspires action. Solar energy companies can continue to take advantage of this by creating content that explains the ITC and its extension, and encourages customers to have their solar energy system installed before the tax credit is gone for good.
Messaging Can Remain Largely the Same
While the extension changes things a bit, the tax credit is still set to drop in 2023 and come to an end for residential systems in 2024, so the urgency is still there. It’s important to make your customers aware of this so they can get their solar installations underway sooner rather than later and take advantage of as many savings as possible—particularly combined with any state incentives. This means that messaging can stay largely the same, but updating existing content to reflect the recent ITC changes is crucial. Doing so quickly will help you get ahead of your competition and position yourself as an expert that consumers can rely on for accurate and up-to-date information.
Take Supply Delays Into Account
When adjusting your content marketing strategy to reflect ITC changes, you should also consider supply delays. As is true with most manufacturing right now, the solar industry is experiencing some supply chain issues, particularly with Tesla Powerwall. Customers who wait too long to get their solar energy project underway may experience manufacturing delays, potentially making them ineligible for the 26% federal solar tax credit if they wait until the end of 2022 to start the process of going solar. While supply chain issues are frustrating for solar energy companies, they do present a marketing opportunity, as you’ll want to encourage people to go solar sooner rather than later. In the case of a long wait time, or if homeowners have house projects they need to complete before going solar, like tree removal or roof upgrades, their system will still be installed early enough for them to claim the highest possible tax credit as well as balancing out your own lead pipeline.
Don’t Forget About Local Incentives!
Even with its recent extension, the ITC won’t last forever and is currently set to expire for homeowners in 2024. But federal credits aren’t the end all be all for solar incentives—there’s a lot happening on the state and city levels as well. These local and utility incentives and renewable energy programs create an excellent opportunity to market towards homeowners and businesses in specific areas, based on the local incentives available to them.
As the trend toward renewable energy continues, there are only going to be more and more incentives on both the state and local level. It’s important to stay up to date on the latest solar energy policies in your area so that you can position yourself as a thought leader and incorporate these incentives into your content marketing strategy.
Resources for ITC- and Other Solar Incentive-Related Questions
While the general bullet points of the ITC are straightforward, some of the qualifications and specifics of tax exemptions can be a little confusing, and you may get questions from customers asking about some of the finer details.
Here are some ITC-specific resources that can shed light on the specifics of the federal solar tax credit:
And here are more resources on general solar incentive information and industry news:
Our Top 5 Stocking Stuffers for a Successful Solar Content Strategy
Check Your Website’s Foundation
A strong foundation is crucial for any website. Make sure yours is in good shape by reviewing your main navigation and ensuring all of your services are clearly represented. You should also check your contact information for accuracy and make sure it’s easy for website users to find. This way, your customers will be able to see what you have to offer and get in touch with you.
Update ITC Info
As we mentioned before, you’ll definitely want to update any outdated information about the ITC and make sure customers can find all the details they need in order to benefit from this incentive. Inaccurate information is prevalent on many solar energy companies’ websites, so this is a great way to get ahead of the competition.
Keep Up With Local & Federal Incentives
Get yourself up to date on what’s happening in your city and state as well as at the federal level. You should also make sure you have resources available (either time or budget) to get new messaging out about changing incentives as quickly as possible, whether that’s through a Facebook ad campaign, a newsletter, or blog content.
Dedicate a Landing Page to Solar Batteries
If you offer solar batteries, make sure you have a permanent landing page dedicated to them. This will give you some nice traction, as solar batteries are becoming increasingly popular and people are searching for them. Without a dedicated page, you’re missing out on potential customers.
Do a Keyword Review
The end of the year is a great time to review all the standard keywords surrounding solar tax incentives and make sure you aren’t missing out on anything. People often search for one thing when they’re really looking for another—for example, many people search for solar rebates when they’re actually looking for solar tax credits because they aren’t familiar with the exact terminology. Understanding what your customers are searching for and what their intentions are will allow you to provide helpful and accurate information. Then, you can relate those keywords back to your services by mentioning solar tax incentives alongside keywords like solar installation, solar battery installation, solar plus battery storage, etc.
Wrapping It All Up
A lot of our solar strategy recommendations center on content, and that’s not just because we love content (even though we do). Content marketing works and is a powerful part of your marketing mix. Readable, searchable content is crucial when it comes to complex and changing topics that require heavy consumer education, like the ITC. And this same strategy translates to any other complex or time-sensitive information about solar.
Celebrate Solar Energy This Season With a Special Holiday Cocktail
Solar energy is always something to celebrate! Our resident solar expert has shared her favorite holiday cocktail “Christmas in a Bottle” so that we can all get into the spirit this season.
Your favorite vodka or gin
1-3 cinnamon sticks
An orange peel with 10-15 cloves
10ish cardamon seed pods
3 star anise
A thumb-size knob of fresh ginger, peeled
A few drops of vanilla
A handful of cranberries
To make, mix everything together and let it sit for a few days or up to two weeks. Taste every so often to make sure the flavors come through without becoming overpowering. When ready to drink, remove the bits, strain, and enjoy!