With the Investment Reduction Act, solar is now more affordable for 2022 and beyond with the return of the 30% solar tax credit. The solar tax credit had stepped down to 26% for 2022, and was set to go down again to 22%, but now it will be 30% for 2022 and for 10 years before it’s set to step down again. This savings is great for home and business owners because when you install solar panels on your home or business you are locking in the cost of the power that comes from that system. Basically, when you install solar, you own the power plant (the solar power plant), so you don’t have to worry about rate increase on that power, you own it. Now that the 30% solar tax credit is back, it’s a great time to go solar. You can also read more about the Impact of the Inflation Reduction Act here.
Within the Inflation Reduction Act, there are lots of benefits for homeowners, business, nonprofits, soon to be EV owners, rural communities, manufacturers, and even utilities.
The solar tax credit
For Homeowners & Businesses:
- The 30% solar tax credit on solar is back
- the 30% energy efficiency tax credit is back
For Nonprofit Organizations:
- A direct payment of 30% of the cost of the solar project will be available for nonprofits starting in 2023.
For Rural Farms and Businesses:
- $3 billion more for USDA Rural Energy For America (REAP) loans and grants.
- REAP grants can pay up to 25% of solar for rural farms and businesses.
- A 30% solar tax credit for Advanced Manufacturing of solar, wind, geothermal, and biomass.
- Production and Investment tax credits of 1.5 cents per kilowatt hour produced of clean energy, and
- New incentives for energy storage
Local Energy Cooperatives and Municipal Power Companies:
- Can now receive direct pay incentives since they can’t benefit from tax credits on clean energy investments.
For Future EV Owners:
- The $7,500 tax credit has been restored for manufactures that had reached the cap. Also, the cap has been removed (some restrictions apply)
- Also, a new $4,000 tax credit for purchasing a used EV