Solar Tax Credits & other Benefits of Inflation Reduction Act
Great news! The 2022 Inflation Reduction Act includes many solar-friendly provisions. Here is a quick summary of the most relevant changes for our customers:
- Commercial and Residential projects commissioned in 2022 are now eligible for the 30% Solar Tax Credit!
This means if LightWave commissioned your project this year, you likely gained an additional 4% in tax benefits. Check with your accountant!
- 30% Solar Tax Credit will be available for next 10 years for Residential projects and for Commercial projects under 1MW AC.
The 30% solar tax credit has been extended until 2032. For commercial projects, there are ways for system owners to claim a 40%-50% solar tax credit, such as using American-made components, and locating the project in a low-income community or on a brownfield. Projects over 1MW AC must meet additional labor guidelines.
- For Tax-exempt, Nonprofit, and Municipal customers, Direct Pay will be an option for projects commissioned in 2023!
Direct Pay means the federal government will reimburse a tax-exempt organization at least 30% of the total cost of their solar project!
- Rural Energy for America Program (REAP) grant funding has increased!
REAP grant eligibility is still limited to rural small businesses, and LightWave can help these businesses apply for REAP grants which cover up to 50% of commercial solar project costs. LightWave has submitted over 100 REAP grants for our customers and has a 95% success rate for REAP grant approvals. Next application deadline is October 31, 2022.
- Stand-alone Energy Storage Systems (such as lithium batteries) are now eligible for the 30% Tax Credit!
This means if you install a battery-only system, or if you add batteries to your solar system in the future, they will qualify for the 30% tax credit. Storage capacity needs to be at least 5kWh for commercial and 3kWh for residential.
LightWave team members are not tax professionals, but we can provide our understanding of the new tax rules and implications for your solar project. Please verify with your tax professional! Go here for guidance from SEIA.
Book a phone call with one of our project consultants to discuss your solar project!