Solar Tax Credits & other Benefits of Inflation Reduction Act
The 2022 Inflation Reduction Act is providing financial assistance and tax breaks for many Americans, and it even includes several solar energy-friendly benefits! Let’s discuss the advantages that this new legislation offers LightWave Solar customers, such as:
- 30% Solar Tax Credit Eligibility for 2022 Projects
- 30% Solar Tax Credit Extension
- Direct Pay for Non-Profit Solar Customers
- Increased Funding for the USDA REAP Grant
- 30% Solar Tax Credit Eligibility for Stand-Alone Energy Storage Systems
30% Solar Tax Credit Eligibility for 2022 Projects
Commercial and residential solar energy projects commissioned in 2022 are now eligible for the 30% Solar Tax Credit. So, if LightWave Solar commissioned your solar power project this year, you likely gained an additional 4% in tax benefits. Check with your accountant!
30% Solar Tax Credit Extension
The 30% Solar Tax Credit has been extended until 2032, and will be available for all residential and commercial solar energy projects under 1MW AC. There are even ways for commercial solar energy system owners to claim a 40-50% solar tax credit, such as using American-made components or locating the solar system in a low-income community or on a brownfield.
Direct Pay for Non-Profit Solar Customers
For tax-exempt, non-profit, and municipal customers, Direct Pay will be an option for solar energy projects commissioned in 2023! Direct Pay allows tax-exempt organizations to be reimbursed by the federal government for at least 30% of the total cost of their solar power project.
Increased Funding for the USDA REAP Grant
Funding for the USDA Rural Energy for America Program (REAP) grant has increased! The REAP grant helps rural small businesses cover up to 50% of the cost of a solar energy project, and LightWave Solar can help you apply. Our team has submitted over 100 REAP grants for our customers, and we have a 95% success rate for grant approvals. The next application deadlines are October 31, 2022 and March 31, 2023 — if you’re a small business in the rural Mid-South, contact us today!
30% Solar Tax Credit Eligibility for Stand-Alone Energy Storage Systems
Stand-alone energy storage systems, like lithium-ion batteries, are now eligible for the 30% Tax Credit! So, if you install a battery-only solar system, or if you add batteries to your solar project in 2023 or later, they will qualify for the 30% tax credit. The system’s storage capacity needs to be at least 5kWh for commercial and 3kWh for residential to qualify.
Learn more about energy storage systems in our case study.
Learn More with LightWave Solar
While our LightWave Solar team members are not tax professionals, we can provide an understanding of the new tax rules from a solar perspective and explain the financial implications of the 2022 Inflation Reduction Act on your project. Please verify with your tax professional and read SEIA’s summary for a deeper understanding.
Contact us today to start planning your solar energy project!