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Businesses across the United States must begin construction on solar or battery energy storage projects before July 4, 2026, to qualify for the full 30% federal investment tax credit (ITC) plus additional Modified Accelerated Cost Recovery System (MACRS) depreciation benefits.
Critical Deadline Details:
1. July 4, 2026 Cutoff The Infrastructure Investment and Jobs Act originally provided the 30% ITC for projects that began construction before a certain date. For many project categories, July 4, 2026, represents a critical deadline after which the credit may step down to 26% or lower.
2. Eligible Projects
- Commercial Solar Installations: Rooftop, ground-mount, and carport systems
- Energy Storage Systems: Battery storage paired with solar or standalone
- Community Solar: Subscriber-based distributed generation
- Solar Plus Storage: Integrated solar and storage solutions
3. Financial Benefits
- 30% Investment Tax Credit (ITC): Direct reduction of federal tax liability
- MACRS Depreciation: Accelerated 5-year depreciation schedule
- Bonus Depreciation: Additional first-year depreciation benefits
- State Incentives: Many states offer additional rebates or tax credits
Industry Response:
Solar Developers: Urgently scheduling projects to meet the deadline. Supply chain constraints and interconnection queues pose challenges.
Commercial Customers: Accelerating procurement decisions for onsite solar and storage to lock in maximum incentives.
Financiers: Increased demand for tax equity financing as project pipelines compress toward the deadline.
Recommended Actions:
For Businesses Considering Solar:
- Immediate Consultation: Contact solar developers immediately
- Interconnection Application: Submit to utility without delay
- Equipment Procurement: Secure panels and inverters with confirmed delivery dates
- Permitting: Begin local permitting processes
- Financing: Secure project financing or power purchase agreements (PPAs)
For Energy Storage Projects: Similar deadlines apply to standalone energy storage systems, making the July 4, 2026, deadline relevant for battery storage projects as well.
Market Implications:
Short-Term: Expected surge in project announcements and construction starts before July 4, 2026.
Long-Term: Potential policy extensions or modifications may be debated in Congress, but businesses should not rely on retroactive changes.
