Take a shine to next year’s taxes

The Inflation Reduction Act (IRA) of 2022 has been signed into law, and everyone’s gearing up for the changes. But what does it mean for the average consumer interested in renewable energy?

1. Investment Tax Credit

Probably the most talked-about update in the bill is that the Investment Tax Credit that a homeowner can get for installing solar has been raised back up to 30%. This credit had been decreasing each year and was set to expire soon. Thanks to the IRA, it’s now going to apply to both residential and business projects from 2022 to 2032 before it begins to drop again. (If you installed solar any time in 2022, even before the bill was signed, this will still apply to your project.) This can save homeowners around $7,000 on an average rooftop system. That’s a pretty big chunk of change!

The bill also includes battery storage under the 30% tax credit. It used to be only batteries connected to a solar project that would benefit, but now it can apply to any energy storage project. So it’s the perfect time to take advantage of the federal tax credit and get your own microgrid.

2. Clean electricity production credit

This tax credit was only for the wind industry for years, but it’s back to including the solar industry! If a solar project meets the requirements, it will get a tax credit of 2.5 cents per kilowatt-hour for the first 10 years of its life. If it doesn’t meet those standards, it’ll get only 0.3 cents/kWh. When dealing in cents it might not seem like much to look at, but it certainly adds up over time. Plus, it will adjust for inflation and increase over time.

3. Domestic solar hardware manufacturing

There are now tax credits to businesses that manufacture components for solar panels, inverters, and racking in the US. One of the greatest benefits of all these clean energy policies is the boost it will give to these industries. Thousands of local jobs will be created because of the increase in demand. From the installers to the manufacturers – and everyone in between – more help will be needed to keep up with the changes to come.

If you’ve been planning to go solar, or even just considering the option, now’s the time to jump on the clean energy revolution. Over the next 10 years, you’ll be getting the biggest bang for your buck because of the advances in technology, tax credits on your system, and money you save on your energy bills. The Inflation Reduction Act will be affecting the country in many ways. The renewable energy sector is ready to make an even bigger difference with its assistance. There has never been a better time to invest in your future, your community, and your world.