The Inflation Reduction Act is of such significance to the clean energy and solar movements that it is difficult to overstate its value in both the short and long term. Passed on August 16th, 2022, the Inflation Reduction Act immediately made a splash by bolstering the incentives for solar and clean energy adoption for all Americans.
When the bill was passed, we spoke at length about just how impactful the new benefits were, but the landscape of conversation has changed in the last few years, and recently there have been those who have expressed doubt for the project of making renewable energy options more accessible and affordable for all. In light of these comments, we wanted to take a moment to review the importance of the Inflation Reduction Act, and remind people just how important this bill really is.
In order to review the importance of the Inflation Reduction Act, we must first explore and understand exactly what is covered by the bill. In our 10 Things You Should Know guide, we covered the major strengths of the bill in great detail, and this piece is an excellent primer for those who are either unfamiliar with the act or who feel they would benefit from brushing up on it in light of the current conversation surrounding it.
10 Things I Love About You
Let’s first take a quick overview of the 10 points listed in this guide:
- Solar Investment Tax Credit Increased to 30%
- Solar Investment Tax Credit Extended for 10 Years
- The Act Goes Beyond Solar
- Commercial Solar Investment Tax Credit Provisions
- Credit Transfers and Direct Pay
- Clean Vehicle Credit
- Solar Manufacturing Incentives
- Methane Fee
- Environmental Justice
- Job Creation
The big policy highlights at the time were the increase and extension of the Solar Investment Tax Credit, which is still widely considered one of the strongest solar incentives on offer. Where at the time this credit was threatening to soon depreciate and expire, now we have the best credit we’ve ever had available for an entire decade.
When it comes to motivating people to make the switch to clean and renewable energy, this tax credit is a heavy hitter. The Inflation Reduction Act also included provisions for making that credit transferable, and available to commercial installations, making it more accessible and attractive to more people. Given that we firmly believe in the benefits of solar for all, this act is a powerful force for positive change, making it possible for more people than ever before to make the switch to solar.
Why the Inflation Reduction Act is Important
Beyond the increased access to solar energy, the Inflation Reduction Act also includes multiple provisions that have made it demonstrably easier for people to access clean energy technology for their homes, technology which might have otherwise been prohibitively expensive for them to consider. These green and high efficiency appliances are so critical to the environmental movement, while also providing a meaningful financial benefit to those who invest in them, that reducing access to the act at this point would be a shame, and a real step backwards.
The EV credit, for example, seeks to incentivize the purchase of vehicles whose emissions are less detrimental to the environment than traditional gas powered vehicles, while also allowing people to double dip on their financial benefits by charging those EVs with solar power. Overall this is a massive net positive for those looking to contribute to the green energy goals of our state and country, while also allowing them to save money on the installation and operation of these appliances. Replacing this measure of the Inflation Reduction with something like a gasoline vehicle tax rebate would undo all the positive work the act has already done, and move us away from the emission goals we’ve set for ourselves.
Protecting the Inflation Reduction Act
The best way to ensure that the Inflation Reduction Act is able to continue benefiting Americans in California and across the country is to vote for candidates who have demonstrated an understanding of its importance. This issue ultimately comes down to the power and value of solar, both for the individual investor and the world at large. If you’re interested in making an investment under the current provisions of the act, our expert consultants are ready to help you get started. You can also get a preview of what solar would look like on your home using our new modeling tool!
