Inflation Reduction Act Super Charges Solar Energy Tax Incentives

How Does The IRA Benefit You?

The Inflation Reduction Act offers a mix of tax credits and financial incentives designed to promote the adoption of clean energy. Instead of penalizing non-compliance, the act rewards those who embrace renewable energy systems, making solar power more accessible and affordable.

Here’s a breakdown of the significant solar-related benefits:

Expanded Investment Tax Credit (ITC)

• 30% Tax Credit for Solar Projects: The ITC has been extended at a 30% rate through 2025, providing substantial savings on solar installations.
• 10% Bonus for Domestic Content: Solar systems using materials made in the U.S. are eligible for an additional 10% credit, encouraging American manufacturing.
• Low-Income Community Bonus: Projects in low-income neighborhoods or energy communities can earn further bonuses, boosting the return on investment.

Production Tax Credit (PTC)

For the first time, solar projects can opt for the PTC, which offers tax credits based on electricity production. It is particularly beneficial for large-scale solar farms.

• Organizations can earn $0.026 per kilowatt-hour (kWh) of electricity their solar system produces annually for ten years, with the rate adjusted each year for inflation.
• Ideal for organizations producing significant energy output.

New Opportunities For Tax-Exempt Organizations

Previously, non-profits, schools, and government entities could not use solar tax credits. The IRA changes this with Section 6417, which allows these organizations to:

• Receive a direct payment for renewable energy credits.
• Transfer tax credits to another entity in exchange for cash.

It will enable more schools, hospitals, and non-profits to adopt solar energy without upfront financial barriers.

Why Is Now The Best Time To Go Solar?

Switching to solar energy has never been more advantageous. The Inflation Reduction Act not only provides financial incentives but also makes it easier to meet sustainability goals. Here’s why now is the perfect time to invest:

• Cost Savings: Lower your utility bills with a 30% ITC and additional bonuses.
• Long-Term Energy Security: Protect your organization from rising energy prices.
• Environmental Impact: Transition to clean energy and reduce your carbon footprint.

Additional Read: Ways Your Company Can Help Curb The Climate Change Threat

How To Maximize Your Solar Incentives

• Check Eligibility: Confirm your organization qualifies for the ITC or PTC.
• Partner with Experts: Work with renewable energy providers like Verde Solutions to design a solar system tailored to your needs.
• Stay Updated: Monitor announcements from the Department of Energy for wage and domestic content requirements.

Additional Read: How to Maximize the Benefits of Your Solar Installation

Hear From An Industry Expert

For a deeper dive into how the Inflation Reduction Act is transforming the clean energy landscape, watch this insightful video from Chris Gersch, CEO of Verde Solutions:

Chris shares why now is the perfect time to switch to solar energy and how the IRA’s incentives make it easier for homeowners and businesses to save money and go green.

Additional Read: How Cogeneration Can Help Your Business Save Money and Energy