Investment Tax Credits (ITCs) were created by Congress in 1962. Legislation was passed in 1990 as part of the Revenue Reconciliation Act, which expanded the ITC into its current form to include the rehabilitation credit and the energy credit (originally 10% and increased to 30% in 2005), as outlined in IRC Sections 38 and 48. The Protecting Americans from Tax Hikes (PATH) Act of 2015 further extended the availability of the 30% ITC from 2016, to include solar projects that are under construction by December 2019, with a gradual phase down of the rate to a permanent 10% ITC level in 2022.
Currently, costs incurred in developing solar energy properties generate credits equal to 30% of qualified energy property expenditures or their fair market value when placed into service. There will be a gradual phase down of the rate to a permanent 10% ITC level in 2022 for projects that begin construction after December 2019.
There is a five year recapture period with recapture being ratably reduced each year during the period. Actual historical recapture of energy ITCs is negligible.
Yes. Excess energy ITCs can be carried forward for twenty years or back for one year.