Why does the solar community care about the Inflation Reduction Act?

In the first quarter of 2022, the solar industry saw its biggest growth in the residential sector, adding 1.2 GW/d to the grid, although other sectors were strained by supply chain issues. Solar installations accounted for roughly half of all electricity generation capacity added in that same quarter. Although industry forecasts predict an overall decline in 2022, solar is expected to return by 2021 in 2024.

Even with the rapid expansion of solar power, the U.S. needs more effort to further boost manufacturing and production if we hope to meet this administration’s goal of 100% clean energy by 2035. There is hope. President Joe Biden signed the De-Inflation Act into law on August 16, 2022. That’s why it’s important to the solar community.

The deflationary law increases domestic production and output

Much of the solar industry currently depends on China to supply critical components. The country’s total contribution to global supply is more than 80%, making the US vulnerable to China’s economic, manufacturing and manufacturing capabilities. If something goes wrong with any of these, as has happened recently, it spells trouble for our solar community.

The new law paves the way to increase domestic manufacturing and production. The government is offering incentives in the form of tax credits to encourage companies to continue manufacturing and manufacturing on U.S. soil for solar panels, cells and other components, including energy storage systems. In addition, the Inflation Reduction Act removes $500 million in appropriations from the Defense Production Act to promote domestic solar technology production.

An IRA extends tax savings to homeowners

The US solar technology industry isn’t the only one benefiting from the new law. You can too. The U.S. Clean Energy Assistance tax credit was originally scheduled to expire in 2022, but the IRA extends those savings for another 10 years. If you are considering a solar installation, the 30% investment tax credit can save you significant cash.

The Inflation Relief Act promotes clean energy for rural communities

Rural communities benefit from the IRA, which seeks to strengthen resilience and electricity reliability. The law provides funding for clean energy projects, including:

• Money for rural energy cooperatives to switch to renewable electricity sources with the potential to benefit from direct tax credits for clean energy
• Increased funding for the Rural Energy for America program, which provides grants and guaranteed loans for renewable energy projects on farms and in rural communities.
• Tax incentives for solar generation and solar installation projects in areas where coal mining or power plants have closed or significantly reduced workers due to the decline of the fossil fuel industry.

These measures support rural America’s transition to reliable, renewable energy sources to increase energy independence and affordability.

The deflationary law offers hope for the future

At Unbound Solar, we join the rest of the solar community in cheering the passage of the Inflation Reduction Act. We are committed to doing our part to support America’s clean energy transition. When you work with us, you get a lifetime partner for all your solar needs. Check out our sale on premium solar systems sourced primarily from the USA to lower your installation costs even further.