The Solar Investment Tax Credit, recently valued at 26%, is now increased to its original value when introduced in 2006 to 30% and is extended through 2032. As part of the Inflation Reduction Act, signed by President Joe Biden on August 16th, 2022, all solar solutions; agricultural, commercial, industrial and residential, can access even more savings than what was offered by the solar ITC originally.
The Solar Tax Credit (ITC) is the single most important driver for commercial and agricultural projects’ affordability. The 30% tax credit significantly reduces the total project cost and now with possible Cash Rebate option (instead of a tax credit), it opens the benefit up to non-profits and other businesses that may not have a tax liability.
Alan Lee, CEO of Revel Energy comments, “This is a big win for solar and its users. The high cost was continuing to rise, this added 4% tax credit or cash rebate levels the initial investment in favor of the users.” He continues, “Increased incentives lowers the payback period for our customers making it much more feasible for them to capitalize on the carbon reducing technology.”
With rising energy costs across the country, more affordable solar and energy storage is expected to bolster the industry for the near and long term future.
An important new feature to the ITC is the inclusion of systems that use standalone energy storage or solar plus storage, as large batteries can help buildings reduce their electricity costs even further.
The new provision for direct cash payment opens a lot of new potential. This feature is accessible to a non-profit or a state, local, or tribal government, and eligible for these projects installed in 2022.
Additional triggers like US Sourced Panel, certain labor requirements and other factors can boost the incentive applied to the total project cost. This means that a solar plus storage system, built under perfect circumstances, could earn a whopping 50% of its value paid back directly to the system owner - reducing their solar investment costs by half.
This is a major incentive for solar investments that can be combined with other programs and incentives like state and federal bonus depreciation to further reduce system costs and provide more value to businesses through sustainability.
Agricultural, commercial and industrial businesses are more competitive with solar with reduced operating costs. And while this 30% is available for the next 10 years, electricity costs continue to grow across the board. The longer a business waits, the more it loses in potential savings that competitors equipped with solar are benefitting from. Claim energy independence for your business and take advantage of the significant savings the solar investment tax credit offers. Contact a Revel Energy Solar Specialist today to see how your business can use the new-and-improved Solar ITC.