In August, 2022, President Joe Biden signed into law the Inflation Reduction Act, laying the foundation for future growth of solar energy in the United States. The new law helps transition American homes, businesses and governments to clean energy generation with several incentives directed toward solar energy.
30% Federal Investment Tax Credit
Most significantly, the Federal Investment Tax Credit stays at 30% for 10 years and will not expire until 2034. Locking the tax credit level for a decade provides stability to the solar energy industry and enables solar companies to make long-term investments in job creation. Because the law was signed this year, any homeowner or business who energized their solar system in 2022 will receive the 30% tax credit, instead of the original 26%. The Federal Investment Tax Credit must be used to offset tax liability, and it can be carried forward for one year to offset future tax liability.
The 30% tax credit extends to solar battery storage, regardless of the source of the energy. You can install a battery storage tied to your solar PV system or tied to your utility grid panel and receive the same credit.
REAP Grants for Ag & Small Business
Farmers and small businesses in rural areas now have greater opportunities to go solar with increased funding through the U.S. Department of Agriculture Rural Energy for America Program (REAP). These grants can cover up to 50% , and combined with loan guarantees up to 75% of the expenses of a solar PV system could be reimbursed. For more information on REAP, visit the program’s website
EVs and Commercial EV Charging Stations
Looking for a new car powered by the sun? The cost of purchasing an electric vehicle (EV) can be lowered with incentives of $7,500 for new cars and $4,000 for old cars. For Illinois residents, EV car owners can receive a $4,000 rebate in addition to the federal tax credit. Business customers of Ameren Missouri can install EV charging stations at their business and receive up to 50% of their costs reduced.
New Features for Non-Profits & Government
Solar energy has become more affordable for non-profit organizations and governments with the Direct Pay of the Federal Investment Tax Credit. This new feature of the tax credit allows non-tax paying entities to receive the full value of the tax credit by making the 30% tax credit refundable. Non-profit organizations and governments can use that direct payment amount to reduce the cost of their system. Additional incentives for commercial solar PV systems would be applied for properties located in low-income communities or energy communities affected by coal plant closures. In total, these incentives could cut the cost of solar by 60%.
Excited About New Incentives?
Ready to be the first in your neighborhood to take advantage of these added incentives. Reach out to us today for your home or business!
