In recent months, solar stocks have seen a significant plunge. Investors, analysts, and industry players are closely watching the developments. One of the key reasons behind this decline is the planned phase-out of solar tax credits. These tax credits have long been a critical driver of growth for the solar energy industry.
The Role of Solar Tax Credits
Solar tax credits are incentives provided by the government to encourage the adoption of solar energy. In the United States, the Investment Tax Credit (ITC) has been one of the most important policies supporting the solar industry. The ITC allows homeowners and businesses to deduct a percentage of the cost of installing a solar energy system from their federal taxes. This has made solar installations more affordable and has driven demand across the country.
The Scheduled Phase-Out
However, these tax credits are not permanent. The U.S. government had previously extended the ITC, but it is now set to phase out gradually over the coming years. For residential solar installations, the credit will decrease step-by-step before eventually reaching zero
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