Hello everyone, today I’m going to dive into a topic that sits at the intersection of the solar industry and prevailing wage and apprenticeship requirements. As with all industries, the solar sector is continually influenced by new legislation and regulation. In this case, I’m referring to the Inflation Reduction Act of 2022, or the IRA as it’s commonly known. The IRA and the resulting guidelines from the Treasury and IRS have far-reaching implications for solar companies and homeowners planning to install solar panels for their home.
Now, you might be wondering, what are these prevailing wage and apprenticeship requirements, and what do they have to do with installing a solar array for home use? First, let me assure you that knowing the implications of this new legislation is essential for anyone interested in solar.
Under the IRA, taxpayers looking to claim the most substantial investment or production tax credits for renewable energy projects, like installing solar panels, need to comply with these new obligations. It means that both the taxpayer and any contractor or subcontractor working on the project must ensure their employed laborers comply with these stipulations, which will affect both small-scale homeowners doing DIY home solar projects as well as larger solar companies.
Remember, these rules have not been formed in isolation. Many industry concerns raised in the comments to the Notice of Proposed Rulemaking were considered in formulating the Final Rule. What became clear is that compliance with these requirements will be determined according to the specific facts and circumstances of a project.
To help you understand, it’s crucial to highlight that these requirements do not apply to “unrelated third-party manufacturers who produce materials, supplies, equipment and prefabricated components for multiple customers or the public in general.” Essentially, most suppliers, not directly involved with the construction, alteration or repair on a project site, are not subject to these obligations. Isn’t that relief!
Next, we need to chat about the payment of prevailing wages. These are wages determined by the Department of Labor’s Wage and Hour Division to be standard for a specific type of construction in a geographical area. In essence, it ensures that laborers and mechanics working on the construction or repair of a facility, such as installing a solar array for your home, are paid equitably. This rule is not a mirror image of the Davis-Bacon Act but shares similarities.
Lastly, we can’t forget about the apprenticeship requirements encapsulated in the Final Rule. Largely consistent with proposals in the NOPR, the Final Rule introduces a practical three-pronged approach for compliance – ensuring the labor hour requirement, the ratio requirement, and the participation requirement are met.
The Final Rule does indeed provide some clarity, especially helpful to solar companies and those planning to install solar panels for their home. However, understandably, it leaves several industry-specific questions unanswered, such as what scope of work constitutes “repair” rather than “maintenance” during the operation of a facility. These questions will require careful consideration and documentation on the part of solar companies and those responsible for project compliance.
Overall, these changes represent an important shift in the renewable energy sector and specifically the solar industry. As a solar enthusiast or a potential solar homeowner, it’s essential to keep abreast of these changes to understand how they could impact your solar journey!
Until next time, keep harnessing the sun’s power!
Original Articlehttps://pv-magazine-usa.com/2024/06/21/a-look-at-the-prevailing-wage-and-apprenticeship-final-rule/
