The solar industry is continuing its momentum thanks to two crucial policies: the Inflation Reduction Act (IRA) and the all-time-high Investment Tax Credit (ITC). Both allow for commercial solar installations to benefit financially.
What is the Inflation Reduction Act (IRA)?
The IRA is a bill passed in August 2022 by the Biden Administration. Among other things, it is a federal environmental policy that calls for enriched renewable energy incentives that now extend to non-taxable entities.
What is the Investment Tax Credit (ITC)?
The ITC is a federal solar tax credit that has been around for a number of years. As of 2021 it had begun its sunset down to 10% for commercial projects by 2024. But thanks to line items in the IRA, the credit was bolstered back up to 30% and extended out for the next 10 years! There is also an opportunity to add an additional 10% credit. More on that below.
What do the new ITC parameters mean for non-taxed businesses?
Prior to the passing of this bill, the ITC only applied to tax paying businesses. As of 2023 this all changed! Now public schools, churches, public hospitals, labor unions, and other nonprofits qualify!
How can I qualify for the additional 10% credit?
If you are investing in a commercial solar project, you have the chance to qualify for additional credits. Adders are further incentives from the government that address different agendas. These adders vary depending on the size and condition of each project. Some examples of adders are: being located in energy communities, meeting domestic content requirements, and qualifying for low-income property.
The opportunity for renewable energy is only furthering!