We have some exciting news to share with you! The Inflation Reduction Act (IRA) was passed and signed into law on August 16, 2022, by both houses of Congress. The question is, how does the IRA affect you?

What’s New?

President Biden signed the Inflation Reduction Act into law on Tuesday, August 16, 2022. One of the many things this act accomplishes is the expansion of the federal tax credit for solar photovoltaics, also known as the Investment Tax Credit (ITC). This credit can be claimed on federal income taxes for a percentage of the cost of a solar photovoltaic (PV) system.

Let’s take a look at the biggest changes and what they mean for Americans who install rooftop solar:

• The ITC increased in amount and its timeline has been extended. Those who install a PV system between 2022 and 2032 will receive a 30% tax credit. That will decrease to 26% for systems installed in 2033 and to 22% for systems installed in 2034. If you’ve already installed a system in 2022, your tax credit has increased from 22% to 30% if you haven’t already claimed it.
• The solar/storage equipment expenses included in the ITC have expanded. Now, energy storage devices that have a capacity rating of 3 kilowatt hours or greater are included. This includes stand-alone storage, but pairing it with solar is ultimately the best choice based on ROI alone.

How Does The IRA Affect Me?

Going solar can now save you more money than ever. The ITC has expanded its coverage so that more people and more products are eligible than ever before. Coverage now includes standalone energy storage for batteries with at least 3 kilowatt-hours (kWh) as well as inverters, heat pumps, heat pump water heaters, and more. The tax credit expires starting in 2035 unless Congress renews it.

How Can I Learn More?

For more information on the ITC, either click here or contact your tax professional or the IRS. If you need instructions on filling out the form, you can find them here. Energy.gov also serves as an additional resource.