The federal tax credit for solar has been raised to 30%, thanks to the Inflation Reduction Act. This legislation, which was recently signed into law by President Biden, is packed with several clean energy initiatives, including the expansion of the Investment Tax Credit (ITC) for solar energy. Previously lower, it was scheduled to reduce to 22% for residential solar at the end of this year before eventually expiring altogether in 2024. This new bill expands the ITC to 30% and extends that rate for the next decade through the end of 2032. Experts are calling these changes to the ITC “significant”. This is great news for both consumers and the future of the solar industry.
Solar is already the #1 added source of electrical generation year after year due to the technology becoming drastically cheaper over the years. While its cost effectiveness has taken a slight hit due to recent supply chain restraints, it’s clearly gaining in popularity among homeowners, companies, and utilities alike.
This recent expansion of the ITC will convince even more people and businesses, perhaps previously on the fence about adopting solar, to sign up. That was the intent of the initial iteration of the tax credit. The original ITC was passed in 2005 and has been extended several times since then to help support the United States’ transition to a clean, independent energy economy. The ITC helped spawn the residential and commercial solar industry as we know it, and the numbers would agree with that. According to the Solar Energy Industries Association (SEIA), employment in the solar industry is 32% higher than it would be without the ITC.
Another technology Pink Energy is familiar with, battery storage, is getting its due in the new and improved ITC as well. The new bill is offering the same 30% tax credit for building a stand-alone energy storage system. (note: the available credit will not double when adding batteries to a solar system)
It’s easy for a company to extol the virtues of legislation aimed at helping the industry they’re in. But this tax credit extends to many other renewable energy projects other than solar and batteries, including geo-thermal, fuel cell, and wind turbine technologies. While we’re certainly glad there is a larger incentive for people to go solar, we’re ecstatic about the future of all clean energy technologies in the U.S. with these tax credits help driving innovation.
Being a leader in the future of renewable energy technology will help us gain energy independence and stay competitive in an increasingly unstable world. While cleaner energy is great for the environment, renewables will ultimately help our economy too. Obviously, we can’t halt fossil fuel use cold turkey, but this expanded ITC will help speed up the transition and ease our reliance on foreign sources of energy.
It may help you do the same! Call 1-877-4-GO-PINK today and talk to one of our solar experts!