The Inflation Reduction Act of 2022 and Its Impact on Solar Incentives
The Inflation Reduction Act of 2022 is set to have a significant impact on solar incentives in several ways:
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Extension and Enhancement of Solar Tax Credits:
- The Act restores and extends the federal solar tax credits, including the residential Investment Tax Credit (ITC). This means homeowners who install solar systems between 2022 and 2032 can deduct 30% of the cost from their federal income taxes.
- This tax credit is also applicable to battery storage installations, not just solar panels.
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Cost Savings for Homeowners:
- By providing a significant tax credit, the Act makes solar installations more affordable for homeowners, potentially leading to increased adoption.
- The 30% tax credit can be carried over to future tax years if it exceeds the current year’s tax liability.
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Environmental Impact:
- The Act aims to accelerate the transition to clean energy, which can contribute to a reduction in greenhouse gas emissions and environmental pollution.
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Phase-Out Plan:
- After 2032, the residential ITC will begin to phase out, dropping to 26% in 2033, 22% in 2034, and finally discontinuing in 2035 and beyond.
Overall, the Inflation Reduction Act provides substantial incentives to encourage the adoption of solar energy systems, making them more financially appealing to homeowners and businesses alike.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-impact-could-the-inflation-reduction-act-have-on-solar-incentives/
