We were fortunate enough to be featured on ABC 7 news to talk about the new solar benefits included in the recently passed Inflation Reduction Act. Windfree’s Jack Johannesson met with ABC 7 investigative reporter, Jason Knowles, at a residence that recently went solar in Downers Grove, Illinois, to talk about the new benefits that this homeowner stands to receive that he wouldn’t have gotten just a few months ago.
The Inflation Reduction Act (IRA), signed in August 2022, includes a lot of great additions that have made going solar easier than ever before. To give some background, the federal investment tax credit for going solar was at 26% (of your total project cost) in 2022 and was set to reduce to 20% in 2023, and just 10% in 2024. The IRA not only increased the tax credit to 30%, but it solidified it at 30% until 2032. That increase resembles, on average, $960 more as a tax credit per homeowner for 2022 and $2,400 more for projects in 2023.
The IRA provided the solar industry with even more than that. In addition to the increase and solidification of the tax credit, that tax credit is now transferable. What this means is that places like non-profits, churches, or schools, who in the past could not take advantage of the solar tax credit, can now monetize that; and even get a direct check for it. Not being able to utilize that benefit had stopped countless projects in their tracks, but now that issue is a thing of the past.
The third main addition in the IRA is that the 30% tax credit now applies to standalone EV charger and battery storage projects. This mainly applies to people who went solar in the past, and now want to add battery storage, as well as people who have electric cars and need a charger at their home.
The federal investment tax credit that you receive for going solar, installing an EV charger or getting a battery storage system, is 30% of your total costs on the project. This includes materials, labor, permitting, and everything else
that you spend your money on. Once the project is completed, you’ll receive a statement of your payments from your solar company and then you’ll give that to your tax preparer when you file your next taxes. It’s as simple as that!