President signs the Inflation Reduction Act with major solar incentives

President Biden has signed the Inflation Reduction Act. the new legislation, known as the IRC, will extend and increase the Investment Tax Credit (ITC) to 30%.

The Inflation Reduction Act includes long-term solar and storage tax incentives and other critical provisions that will boost production and investment in residential and commercial solar construction.

The business investment tax credit is extended and lifted to 30% for projects that have started or start construction before the end of 2024 and the credit becomes available to stand-alone storage. Solar also becomes eligible for the production tax credit which is currently at $0.026/kWh for 2022 and rises with inflation. After 2024, the credit transitions to a “tech neutral” structure.

The Inflation Reduction Act is expected to cut greenhouse gas emissions about 40% below 2005 levels by 2030, according to The New York Times.

“This legislation is the most transformational investment America has ever made in our climate future, and we are thankful to our members, the clean energy community and every one of our solar champions in Congress for their work to get us to this historic moment,” said Abigail Ross Hopper, president and CEO of SEIA. “The solar industry has set a goal to account for 30% of all U.S. electricity generation by 2030, and this legislation will be a catalyst for reaching that target. Now the work can begin to build out America’s clean energy economy with historic deployment, domestic manufacturing, investments in low-income communities, energy storage, smoother interconnection and so much more.”

You can read the SEIA’s guide to the solar and energy storage provisions here.