Welcome to the IRA Deep Dive for Solar Geeks

The news has been brimming with headlines like “The Senate just passed one of the biggest bills to fight climate change, ever”, “the boldest climate package in US history”, or this heavy-hitter, “Inflation Reduction Act stokes a climate investment “‘gold rush’.”

So needless to say, there’s been a lot of amplified energy (get it?) over what this means for combating climate change. But what does this actually mean for you: a homeowner, energy user, climate crusader, solar fanatic?

Our top priority at Sun Badger Solar is to ensure all of our customers, both current and future, have all the facts. Leave the nitty gritty legalese explanations to us!We’re here to break down the solar implications of the Inflation Reduction Act, so you can make the best decisions for your situation.

The Inflation Reduction Act Passed: What That Means for Solar | The news has been brimming with headlines like “The Senate just passed one of the biggest bills to fight climate change, ever”, “the boldest climate package in US history”, or this heavy-hitter, “Inflation Reduction Act stokes a climate investment "'gold rush'."

#1 Giant Jump in Investment Tax Credit (ITC)

The Gist of It:

For many, this is the most significant cost savings tool someone can take advantage of to offset the cost of going solar. With the passing of the IRA, the Federal ITC jumps back up to 30% for the next 10 years. Even after 10 years, the law provides for healthy incentives with the tax credit dropping to 26% in 2033 and 22% in 2034. The credits will also expand into electric vehicles and energy storage, which makes this an advantageous time to finally invest in a home EV charging station or battery backup solution.

Did you install in 2022? Don’t worry, they’re letting you in on the action as well (insert Oprah “And you get 30%, and you get 30%!).

The Deep Dive:

Knowing that the federal government is committed to more than a decade of substantial tax credits means that solar companies — as well as homeowners and businesses — can plan accordingly and take advantage of the attractive benefits of installing solar:

  • Accumulates more security in the industry
  • Erases investment fears for job-makers and manufacturers in solar
  • And for the first time in decades, creates a large stretch of the future where companies like ours can consistently plan and grow, which benefits our customers.

FAQ:

If my solar system was installed in 2022, what will my solar tax credit be?
You’re in on that high, high 30%. Remember to always speak with your tax professional.

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#2 Incentivize More American Manufacturing

The Gist of It:

While Sun Badger Solar has traditionally made a practice of sourcing US-based panels and
components when possible, it’s not always easy. The IRA means to combat that by providing tax credits to domestic manufacturers who produce solar components. And we’re not talking about just solar panels — trackers, inverters, energy storage, and critical minerals are all included. This has the potential to both boost US manufacturing but also help alleviate supply-chain issues.

The Deep Dive:

Like most industries, 2022 highlighted real and potential gaps in the supply chain for the solar industry here in the United States. One big gap: stateside lack of availability for critical pieces needed to install solar for residential and commercial. And it’s hard to invest in such large-scale operations if not financially beneficial to the manufacturer. Incentivizing key components means we can now be competitive in the world market, and bring back manufacturing jobs. It is also a key piece that will help solar companies hit the renewable energy goals set by The Biden Administration and provide 45% of the country’s electricity by 2050.

If you want to really dig into the numbers we recommend this article from Solar Power World. It does a great job of breaking down the details of what products are incentivized and how much companies can save.

FAQ:

As a solar customer, do I get more money back if I choose American-Made?
Right now we are reading that the additional tax credit applies to the manufacturers. But we are constantly monitoring everything as it rolls out and will be paying close attention so we can bring you the most up-to-date information. As always, you can always chat to our Solar Experts to hear what your options are.

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The Inflation Reduction Act Passed: What That Means for Solar | The news has been brimming with headlines like “The Senate just passed one of the biggest bills to fight climate change, ever”, “the boldest climate package in US history”, or this heavy-hitter, “Inflation Reduction Act stokes a climate investment "'gold rush'."

#3 Non-Profits, Low-Income, & Vulnerable Communities

The Gist of It:

Now we know this one might be more niche, but it is a giant step in the right direction to combat climate change. The Inflation Reduction Act includes new rules for non-profit incentives that make going solar even more feasible. Sun Badger Solar routinely works with non-profits (like Tricklebee Café) to help them navigate solar financing and incentives, Solar can lower their operating costs as they reduce or eliminate their electric bills.

The Deep Dive:

Non-profit and government organizations will now have a direct pay component to make it easier for these entities to take advantage of the benefits of solar. It also includes $1 billion in grants to improve energy efficiency in affordable housing. $60 billion in grants will be available to improve clean energy, air quality, and transportation in vulnerable communities. Efforts to enhance climate resilience in public housing and for tribal and Native Hawaiian communities will also have more support. (Source)

FAQ:

How do you navigate the decision to take your non-profit solar?
The easiest answer to this? Go at it with a team and speak to our Solar Experts. They know the in’s and out’s of each state’s unique opportunities for non-profits.

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Take Advantage of the Inflation Reduction Act

The Inflation Reduction Act is a huge boon for both solar consumers and the industry. As a homeowner, you’ll be able to capitalize on higher tax credit incentives for your solar installation. The domestic manufacturing of solar products also got a kickstart with added incentives. Non-profits and vulnerable communities will now have easier access to grants and incentives that will make going solar much more attainable. Over the next few months, Sun Badger will keep an eye on how the benefits roll out. Will be sure to pass along any updates to you.

Excited to get started on solar installation? Contact a Sun Badger Solar expert for more information and a free quote.

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*Sun Badger Solar assumes no responsibility or liability for any errors or omissions in the content or this article. The information contained in this article is provided on an “as is” basis with no guarantees of completeness, accuracy, usefulness or timeliness without warranties of any kind whatsoever, express or implied.

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