We’re one year in with the Inflation Reduction Act – HAPPY BIRTHDAY, CLIMATE BILL! 

The IRA has brought in $100 billion in United States (U.S.) solar and storage investment in the last year. SEIA (Solar Energy Industries Association) data indicates that the law’s subsidies for manufacturing and generation are greatly impacting the solar industry one year in. 

How is the IRA impacting the solar industry?

• Between August 2022 and now, companies like First Solar, Maxeon, and Qcells announced billions of dollars in projects.
• 51 new or expanding domestic manufacturing projects have been announced.
• “By 2026, the U.S. will have over 17 times its current manufacturing capacity across modules, cells, wafers, ingots, and inverters when these announced factories are in operation.” (SEIA, 2023)

So, what is the Climate Bill or the Inflation Reduction Act (IRA)?

On August 16, 2022, Congress passed the largest climate bill in U.S. history with the Inflation Reduction Act (IRA). The IRA provides $370 billion in funding for clean energy and environmental justice initiatives. A significant portion of IRA funding includes tax credits and rebates for homeowners, renters, and businesses to upgrade their homes or buildings to be energy efficient or to purchase clean energy equipment like solar panels, electric vehicles (EVs), and heat pumps (NYSERDA, 2023). These incentives will be offered through 2032.

The provisions of the IRA include many new solar incentives for businesses, municipalities, non-profits, rural companies, low-income communities, and more. These incentives include a 30% Federal Tax credit for the next ten years and additional bonus credits for projects installed in low-income or rural communities, for example. 

The passing of the IRA is moving the U.S. much closer to its climate goals, which include the creation of a “carbon pollution-free power sector by 2035 and net zero emissions economy by no later than 2050.” 

What does this mean? 

• Federal Investment Tax Credit (ITC) is increasing to 30% for both commercial solar and residential solar projects and is now a transferable credit.
• The 30% ITC now applies to standalone storage/battery projects 
• Nonprofits and municipal and tribal governments are now eligible for a 30% direct pay tax credit
• Bonus credits for meeting specific domestic content requirements, locating in energy communities, or allocated credits for being on qualified low-income property
• Additional REAP (Rural Energy for America Program) funding is available for agricultural producers and small businesses in eligible rural areas 
• Tax credits up to $7500 for new electric vehicle purchases and $4000 for used electric vehicle purchases

 While this law provides ample financial savings and investment incentives to the industry, it also creates a new path for businesses to meet crucial ESG/CSR goals that they have set. 

A note from GreenSpark leadership

“The Inflation Reduction Act is a monumental moment in the clean energy revolution. When the President signs the bill into law, Clean Energy Businesses like GreenSpark Solar will be presented with a more level playing field to compete with massive utility companies and the fossil fuel industry. We have been in business for 20 years and to date, have never had more than a few years of runway. Having ten years of runway will give GreenSpark the ability to scale our efforts to combat the climate crisis and gain the financial wherewithal to end the energy business inequities exacerbated by the local utilities and the fossil fuel industry here in Rochester. The Inflation Reduction Act, when signed into law, is also going to allow GreenSpark to build on and improve our vision to be a choice employer and provide for our people at every turn while employing hundreds more than we already do!” – Kevin Schulte, CEO, August 2022

“The climate provisions in the Inflation Reduction Act (IRA) are truly historic and represent a massive investment in building American manufacturing to support our fight against climate change. Is it perfect? No. The gaps will be filled by the countless innovative actions of small businesses such as GreenSpark Solar and others that will utilize the provisions of this bill to accelerate market-based solutions to climate change. The IRA will provide for the democratization of renewable energy savings, the creation of good and meaningful jobs here in Rochester and beyond, as well as sustainable economic development that’s good for businesses, communities, workers and the planet.” – George McConochie, COO, August 2022

Still have questions? Interested in learning more about the IRA and solar? Want to receive a free solar quote? Reach out to the GreenSpark team today, and a solar expert will be in touch shortly: