Aug. 29, 2022
The Inflation Reduction Act Marks a Huge Win for Folks Going Solar!
By Jordan Freytag
The initial cost of going solar can be the most challenging part about getting a system installed for your home or business. Federal incentives have helped homeowners and businesses go solar for the last ten years but the tax credits were declining and set to expire in 2024, leaving the solar industry wondering about the future of renewable energy.
With the introduction of the Inflation Reduction Act, incentives were not only increased but extended to communities that were unable to take advantage of prior incentives. The passing of this act helps to ease the challenges twofold, helping to create more jobs in solar installation and solar equipment manufacturing while simultaneously helping to reduce our collective carbon footprint.
The Inflation Reduction Act , at 775 pages, is a complex bill and it may take several months for final rule making. However, the benefit to residential and small commercial solar is clear now. We’ve broken down the parts that deal directly with solar and battery back-up installations as it may pertain to you, your business, property, and/or organization.
Read the main IRA points below:
- 30% tax credit for homeowners and businesses who install solar until 2032.
- Note: If you installed solar this year, in 2022, and were expecting a 26% credit, you can now claim a 30% credit.
- Allows nonprofits, schools, and municipalities to take a direct payment in lieu of the 30% tax credit. As entities that don’t pay taxes, these institutions were previously unable to benefit from the credits.
- Energy storage installations are now eligible to claim 30%--even if they are not a part of a renewable energy system.
- Expands funding for the Rural Energy for America Program (REAP) to help farms and rural small businesses to go solar (more details to follow).
- Provides funding to help electric cooperatives and tribal communities go solar.
Want to Learn more about incentives specific to your state?
Check out our pages about each State:
Dive deep into the Inflation Reduction Act with these Resources:
Solar Energy Industry Association Detailed Bill Breakdown PDF:
This Online Calculator, which allows you to see what incentives are available to you:
The Energy Show Podcast: