The Inflation Reduction Act (IRA) is a multifaceted piece of legislation that will greatly improve future solar projects. The act was passed and signed into law in August of 2022. We have broken down benefits solar projects will see here.
What is the objective of the IRA?
This wide-ranging legislation seeks to achieve several important goals, from lowering the cost of prescription drugs to reducing the national deficit. A large portion of it is also dedicated to the fight against climate change. Included in the IRA is nearly $370 billion in investments in climate change policies that will put the nation on track toward a 40% reduction in emissions by 2030.
Increased Tax Credit
Under the IRA, federal tax credits for solar that were scheduled to be eliminated or reduced are significantly extended. Prior to the IRA’s passage, solar tax credits for small commercial installations were scheduled to decrease from 26% to 22% in 2023 and then to 10% in 2024 and beyond. These types of projects usually generate significant energy savings for their beneficiaries and are very commonly adopted by businesses and municipalities. Thanks to the IRA, these tax credits are now 30% and will remain at that level at least until 2033, a remarkable benefit for businesses and property owners.
Other Economic Benefits
More broadly, the IRA will have far reaching positive impacts for renewable energy and the country’s economy in general. It will increase the deployment of zero carbon emission projects across the country and reinvigorating domestic production of the component parts that solar energy projects rely on. Additionally, the IRA guides project development to areas of critical interest including low-income, brownfields, and other energy community areas.
Why Work With Verogy to Develop Your Project?
Our company’s motto is to “impact positive change.” Under the IRA, our company can dramatically accelerate our positive impact through increased job creation, more electricity savings for customers, and the reduction of carbon emissions. It’s one of the most impactful pieces of clean energy legislation in our nation’s history, and we’re grateful to the policymakers and clean energy advocates who worked so hard to make it a reality.