INFLATION REDUCTION ACT 2022​
What does this mean for residential solar?
Below is a compilation of anticipated questions regarding the recently passed, historic Inflation Reduction Act. As your local solar experts, we have been keeping informed with what the legislation means for you.
Information may change as we discover more details about how this historic legislation will affect the solar industry and our customers. Here is what we know to the best of our knowledge at this time.
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The FITC (Federal Investment Tax Credit) is now set at 30% of project cost for the next 10 years (previously this had been 26%) for solar and storage installations.
Yes, it is retroactive to the start of 2022. Â Any installation completed in 2022 and before 2033 will qualify for the 30% tax credit level!
The tax credit has increased from 26% to 30%. More importantly, it is locked in for 10 years. This extended timeline of a promised tax credit creates unprecedented stability for the entire solar industry.
The previous credit allowed you to carry forward 2 years. This timeline will remain until further clarification comes out.
There is no limit on the maximum amount you can receive back. It will be determined based off the percentage of your total project costs. The maximum percentage you can claim is 30% of the total project costs.
We strongly recommend talking to a tax professional for questions involving anything out of the direct solar project scope.Â
For an estimate on how the IRA could discount other energy efficiency improvements, please visit:
Everyone’s personal priorities will differ, but we can offer a professional take on how to consider performance and financial impacts of USA-made products. Our answer is – not really. There is no bonus for domestically produced solar panels for residential projects!
Part of what makes solar such an ideal investment is the tried and tested nature of today’s solar technology. Arch selects products and partners with decades of success and improvement behind them. The IRA gives American solar manufacturing the runway to begin growing in earnest, but it will be years if not decades before they achieve the standard of excellence Arch has set for the products we provide to customers.Â
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We intend to offer American-made solar products as soon as they are available and have reached the high-standard we set for all our products.
Direct pay is currently scheduled to become available for state and tribal governments, certain tax-exempt entities, and rural cooperatives. This does not apply to residential projects.
