First things first: It’s time to celebrate! In August, the Inflation Reduction Act of 2022 was passed, a landmark piece of legislation covering healthcare, tax law, and climate. While there is plenty to rejoice about throughout the bill, the climate provisions have us most excited: $370 billion in spending and tax credits for cleaner energy initiatives!
The IRA is the “largest investment to fight climate change” in US history, and it’s estimated that the new law’s provisions will reduce greenhouse gas emissions by 40% by 2030 (in comparison to 2005 levels). The Inflation Reduction Act covers a lot of topics, but today we’re going to focus on the changes relevant to solar and how YOU can benefit.
The Inflation Reduction Act & Solar Panels: Some High-Level Takeaways
Many provisions within the Inflation Reduction Act of 2022 either directly or indirectly affect the solar industry as well as those looking to add solar panels to their homes or businesses, including:
- Revisions to the solar Investment Tax Credit (more on that in just a moment!)
- $4.3 billion in residential energy efficiency and electrification tax credits
- $4.3 billion in residential rebates including electric panel and wiring upgrades
- Manufacturing tax credits for solar panels, inverters, trackers, batteries, and more
- Billions in grants towards pollution reduction and environmental justice
It’s estimated that the IRA will create 9 million jobs! Anyone looking for good environmental news has plenty to be happy about, especially since the likelihood of significant climate change legislation being passed was slim only a month ago.
What Does the IRA Do to the Federal Solar Tax Credit in 2022?
Perhaps most important for home and business owners considering going solar, the Inflation Reduction Act of 2022 makes some big changes to the solar Investment Tax Credit (ITC), more commonly known as the federal solar tax credit. Here are the changes:
- The tax credit has been increased to 30% through 2032 (when it will step down over several years before being eliminated for residential solar installations).
- The 30% tax credit rate is retroactive for all of 2022, so anyone who has already installed or will be installing solar by the end of this year can qualify.
- Direct-pay option now allows certain tax-exempt entities and non-profit organizations to take advantage of the solar tax credit
This is great news for those who have already finished solar installation this year, for those who were expecting to only qualify for a 26% credit, and for anyone looking for a good excuse to reach out to a solar company near them to add panels to their home or business as soon as possible.
Take Advantage of the Inflation Reduction Act Solar Tax Credit Today with My Generation Energy
Since 2008, My Generation Energy has been the go-to solar provider offering residential and commercial solar panel installation and maintenance services throughout Cape Cod, the Greater Boston area, Massachusetts’ South Shore and South Coast, and beyond.
We’ve helped hundreds of solar owners take advantage of the many solar incentives available to Massachusetts residents, including the federal solar tax credit. And thanks to the Inflation Reduction Act, we’ll be able to help many more! Save thousands on solar installation and benefit from decades of free and CLEAN solar energy for your home or business with our team.