Congress recently passed a major piece of legislation, the Inflation Reduction Act. This wide-ranging bill includes several provisions that will make it easier for you and your community to benefit from solar energy.
But what specifically is in this bill that can help the average person or community go solar? We’ve provided an overview of the bill in its relation to how it helps folks, businesses, and organizations make the switch to solar energy below.
Makes installing solar on your home more affordable
The biggest provision in this bill for homeowners will be a 30% tax credit off the cost of installation. The credit is available for systems installed until the end of 2032. The credit then steps down to 26% in 2033 and 22% in 2034.
If you installed solar this year and were expecting a 26% credit, you will be eligible for the full 30%.
This means that the sooner you start to go solar the more money you will save, not only on electrical bills, but on the cost of installing!
But what about if you’re part of a non-profit, a school, or a religious organization who is tax exempt?
Helps nonprofit organizations and municipalities go solar
Well, good news! Only individuals and entities who pay taxes can use tax credits. This means these institutions were left out. But, the bill provides direct cash payments to tax-exempt organizations. Not only does this incentivize them to go solar, it also garners publicity and awareness around solar energy.
What about rural America, the majority of America’s land mass? Does the bill provide incentives for these folks and communities?
Expands solar in rural America
Yes! The bill increases funding for the Rural Energy for America Program (REAP). REAP offers grants for rural solar projects. REAP provides grants and loans to farms and small businesses in rural America to invest in energy technologies like solar. The bill also makes carve outs for tribal lands and marginalized communities to help them go solar as well.
Encourages rural electric cooperatives to go solar
The bill also sets aside money for rural cooperatives to transition to clean energy. America is home to 900 rural electric cooperatives. These utilities power 56% of the nation’s landmass, 42 million people, and more than 21 million homes, schools, businesses and farms. The bill provides $9.7 billion in new funding to transition these utilities to renewable energy sources, like solar.
As you can see, the IRA does a lot to encourage homes, businesses, and even cooperatives, to go solar. But solar is just one step to taking control of where your electricity comes from. Fortunately, the bill also has some interesting provisions for battery storage and electric vehicles (EVs)!
Makes installing batteries more affordable
For the first time, stand-alone battery storage devices will also be eligible for tax credits. People who purchase battery systems can take a 30% credit. Previously, solar owners who paired their system with storage could take a credit on both. Now tax credits are available to anyone who purchases a battery system. This will spark demand for battery storage and lower prices for all consumers.
Battery storage allows solar owners to consume more of the electricity they generate themselves. This provides peace of mind when storms hit. More battery storage benefits everyone too. It reduces strain on the electric grid when demand is high. This saves everyone money and protects us all from blackouts.
Makes purchasing electric vehicles more affordable
The bill provides up to $7,500 tax credits for the purchase of a new EV. It provides up to $4,000 tax credits for the purchase of previously owned Clean Vehicles. EVs allow solar owners to drive on sunshine!
Encourages the United States Postal Service to electrify their fleet
Makes $3 billion available to the USPS to electrify their fleets and provide charging equipment.
We recently hosted a webinar to dive into the details of the bill. Watch here:
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