Passage of the Inflation Reduction Act is spurring some significant changes in the solar industry. The act includes thousands of dollars in tax credits and rebates for people who install solar panels, buy electric vehicles, or make energy-efficient upgrades to their homes.
First, the Investment Tax Credit has been increased from 26% to 30%. This means people who install solar systems between 2022 and 2032 can save up to 30% on their federal tax bill.
The 730-page bill, which was passed solely along party lines, has a lot of fine print. Here are some important things to note:
- The 30% applies to both businesses and resident projects and will last until the end of 2032.
- The 30% credit will be retroactively applied to homeowners who have installed a solar system since the beginning of 2022.
- The residential tax credit is not transferable, which could impact homebuyers.
- Energy storage projects can now receive the 30% tax credit, even if they are standalone systems.
- Larger commercial projects have additional requirements.
Starting in 2025, the Investment Tax Credit will shift into a broader credit that applies to more emissions-reducing technologies. The tax credit will begin to decrease after 2032, to 26% in 2033 and 22% in 2034.
To pay for the new legislation, the bill includes a 15% minimum tax on corporations with profits over $1 billion. Republicans have criticized the act as overreaching. They also said spending billions of dollars will only add to the country’s inflation rather than solving it.
Get Your 30% Tax Credit Today!
If you are thinking about going solar or adding panels to your home or commercial solar system, there has never been a better time! We recommend connecting with our team and a tax advisor to learn more about claiming your federal solar tax credit.
Overall, you could qualify for up to $10,000-plus in tax breaks and rebates for clean energy technology. Don’t miss out on this opportunity! Fill out the form below to get started with your local solar experts at A.M. Sun Solar.
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A.M. Sun Solar is the local leader in custom solar solutions and installations on the Central Coast. For over 15 years, A.M. Sun Solar has provided high quality, cost efficient solar energy to residences and small businesses in San Luis Obispo, Monterey and Santa Barbara counties. With a wide variety of financing solutions available, affordable pricing, custom solutions and complete installations from permit to interconnection, A.M. Sun Solar is the go to local solar company on the Central Coast.