With the passage of the Inflation Reduction Act, the Biden Administration committed to the largest climate investment in US history. It offers energy programs and incentives for those that invest in clean energy, including homeowners who decide to install solar panels. Beyond solar panels themselves, the bill incentivizes people to utilize electric vehicles, heat pumps, and water heaters, too.
Energy prices are on the rise. Also, with challenges with power grids all over the world, making the switch to solar power has become a no-brainer. Let’s dive into how these new tax incentives might push you over the edge.
What’s in the bill?
The first and most important feature of the bill is the savings available to individuals that install solar panels for their homes. Tax credits of up to 30% of the cost of buying a solar system and home battery storage. Many systems can cost upwards of $20,000 to install. These tax savings make that number much more accessible for families across the country.
The bill also invests more money — $1 billion to be exact – in grants for the Department of Housing and Urban Development to update low-income housing efficiencies. These funds can go toward water efficiency, air quality, electric upgrades, and climate resilience needs. Solar panels fall under almost all those categories.
New home developers will also receive funds for building homes that are Energy Star-certified. This follows a program that gave builders credits for building energy-efficient homes; this program expired in 2021 but is essentially re-instated through the Inflation Reduction Act.
Lastly, for small business owners in the US, the government is offering tax deductions of up to $1 per square foot if they make their business more energy efficient. The tax credits, similar to individual households, can cover up to 30% of the cost of installing solar panels.
It Takes More Than Incentives
There are perks to installing solar panels. The industry as a whole needs to be made to be more affordable and accessible. These challenges are also addressed by the bill. Solar power is more valuable when paired with an electric car, heat pumps, and other electric appliances. The bill makes all of these technologies more affordable, reducing the number of households that won’t participate due to financial obstacles.
Solar: The Key to Beating Rising Energy Prices
Though installing solar panels requires a hefty upfront investment, households of all incomes can access help when they need it most. As energy prices continue to rise and the climate crisis makes its impact known, it’s best to prepare for the future and make the switch to solar, especially if the government will give you money to do so. Call Del Sol Energy today for a solar consultation.