In a monumental turn of events, President Joseph R. Biden Jr. signed a substantial piece of legislation on Tuesday that could have a major impact on both the solar industry and average citizens. Dubbed the "Inflation Reduction Act," the bipartisan bill is designed to cut down on greenhouse gas emissions and help prevent global warming. Among other things, it will provide tax breaks for those who invest in solar energy, as well as increase funding for green technology research.
While the bill includes many policies such as lowering the prices of prescription drugs and increasing the generosity of Medicare benefits, we will be focusing on the renewable energy aspects of the bill which encourage the development of renewable energy and reduce the impact of climate change.
The bill will quicken the development of emission reduction goals and put the United States on a path to cut greenhouse gases by 40% below 2005 levels by 2030, considerably narrowing the gap with Biden's Paris climate agreement goal of cutting emissions by at least half by that date. This legislation also marks a significant increase in grants, loans, and tax credits for the domestic manufacturing of clean energy technology.
For the solar industry, this is big news. The tax breaks and increased funding could help spur further innovation and bring down the cost of solar panels and other equipment. This, in turn, would make going solar more affordable for the average consumer. And as more people switch to clean energy, it will help reduce our reliance on fossil fuels and make a dent in greenhouse gas emissions.
So what exactly does the Inflation Reduction Act mean for the average Joe?
Well, if you're interested in going solar, now is a good time to do your research and see if it's right for you. There are more resources and incentives available than ever before, and the technology is only getting better and cheaper. Plus, with the Inflation Reduction Act in place, you can be sure that your investment will go further.
Democrats and some energy experts said the Inflation Reduction Act would lower consumers' electricity bills and prices for things like rooftop solar panels, energy-efficient appliances, and electric vehicles.
Under the bill, a home improvement credit for energy efficiency would enable homeowners to deduct up to 30% of the cost of upgrades like heat pumps and insulation from their taxes.
Another provision extends a program that allows homeowners who install solar or battery storage systems to deduct 30% of the money spent on the project from their taxes.
According to Rewiring America, a nonprofit organization that advocates for increased energy efficiency, the bill's incentives, and tax credits may save families about $1,800 each year.
So if you're thinking about going solar, now is a great time to do it. It's good for your wallet and good for the environment. Win-win!
If you’re interested in a more thorough breakdown of the bill, the New York Times has a great article detailing the spending and tax cuts.