Examining the Impact of the Inflation Reduction Act on Solar

When the United States Congress passed the Inflation Reduction Act of 2022, they changed the landscape of sustainability in the United States forever. Not only will the act serve as a stepping stone for the United States to become a leading figure in the fight against climate change, the act will also make sustainable energy solutions much more accessible for the average American household. Below we will examine the implications of the act, and why there has never been a better time to pursue a solar project for your home. 

 United States government officials have been looking to make a major move in the sphere of environmental sustainability for decades. While the Biden administration has yet to be as aggressive on issues of sustainability and climate science as many in his voting base would have hoped, the passing of the Inflation Reduction Act marked a steep change in the discourse on the United States and the climate. 

From a macro view and environmentalist perspective the most significant feature of the bill is the approximately 370 billion dollar investment the United States government will make in clean energy and climate mitigation/adaptation over the next decade. The commitment to clean energy means that the United States will be on pace to cut our national carbon emissions by roughly 40% by the  year 2030. The bill’s passing should have an international impact, in encouraging other top emitters to further invest in clean energy and climate mitigation. On a domestic level, the bill encourages Americans to invest in clean energy like never before. 

For those considering an investment in a solar energy system, there has never been a better time to pull the trigger. The Inflation Reduction Act increased the current Investment Tax Credit from 26% to 30% for those investing in clean energy systems. The Investment Tax Credit takes 30% of the total cost of your solar project and reimburses the property owner through tax credits. The tax credit can be applied to commercial or residential projects. Additionally, the bill extends the lifespan of the tax credit all the way to 2032, giving American clean energy investors an opportunity to capitalize on the credit for the next decade. 

In addition to the Investment Tax Credit, the bill has other tax based incentives to invest in the United States’ growing clean energy economy. For instance, those living or operating a business in brownfields or previously fossil fuel centered economic areas may be able to claim an additional 10% tax credit toward their solar project. Municipalities or companies looking to sell solar through the development of community solar can also claim an additional 10% tax credit if the project provides solar to low-income individuals. 

In short, this groundbreaking bill cements the fact that there has never been a better time to invest in clean energy. For more information on how you can utilize solar for your commercial or residential property, contact Northstone Solar today.  

Sources:

https://www.pv-magazine.com/2022/08/15/whats-in-the-inflation-reduction-act-for-the-solar-industry/

https://www.nature.org/en-us/newsroom/us-house-passes-landmark-climate-bill/