The United States Congress recently passed the Inflation Reduction Act (IRA), which among several other things, aims to promote clean and renewable sources of energy. This is great news for homeowners who have been thinking about installing home solar systems, but perhaps needed a little push to do so. And by “push” we mean attractive incentives that will help you save up to 30% on solar installation costs. Let’s take a look at what’s in the IRA and the benefits you can access by installing residential solar panels in 2022.
Inflation Reduction Act
The Inflation Reduction Act was passed in August 2022, and it’s touted as being a game-changer for both the solar industry and solar manufacturing in the United States. Some of its key provisions include changes to tax laws that will impact solar manufacturing, and incentives to combat climate change.
Investment Tax Credit
The Investment Tax Credit has been increased from 26% to 30%, meaning if you install a home solar system you can claim back 30% of your installation costs. This tax credit applies to both residential and commercial solar systems, and it will be in effect until the end of 2032.
Additionally, battery-based solar energy storage systems also qualify for the ITC on their own – you don’t need to have purchased one as part of a new solar installation to apply for the tax credit.
Clean Electricity Production Credit
The solar power industry is now eligible for the Clean Electricity Production Credit. All solar power projects that meet wage requirements will receive a tax credit of 2.5 cents / kWh for the first 10 years of the project’s duration. This credit will be increased according to inflation year-on-year.
Domestically Produced Hardware
To encourage an increase in US-based solar manufacturing, solar manufacturers will receive various tax credits for producing the components of a solar system, including solar panels, inverters, and racking components.
Community Solar Projects
Solar panels that direct their energy into community solar projects for low-income people will receive an additional 10% tax credit, meaning the total tax credit could potentially be around 60!
If you’d like to know more about how installing solar panels can help you lower your energy bills, or if you have any other questions about solar panel installation in NJ, please contact our team at Green House Solar today or visit: https://greenhouse.solar/