Hello, solar enthusiasts!
In today’s post, let’s dive into some recent changes happening in the solar industry, specifically about the Low-Income Communities Bonus Credit Program under the Inflation Reduction Act’s (IRA) Investment Tax Credit (ITC). These changes could potentially impact the accessibility of solar panels for your home, particularly in terms of energy storage systems. If you’ve been considering tapping into a solar company for your home’s energy needs, this is something you’ll want to understand.
The major shift is that energy storage systems might no longer qualify for additional tax credits by 2025. Currently, under IRA rules, renewable energy projects constructed in either low-income communities or tribal land could receive a bonus tax credit. These small-scale ventures, featuring less than 5 MWac output, could beef up their 30% tax credit with an extra 10%.
Similarly, larger projects installed in qualifying low-income residential buildings or encompassing qualifying economic-benefit endeavors could claim an additional 20% on top of the standard ITC. These add-ons have been integral for many solar companies in making their technology affordable to communities that need it most.
The challenge is looming as the Low-Income Communities Bonus Credit transition to a so-called technology-neutral “Clean Energy ITC”. This regime change means that the emphasis is now on zero greenhouse gas emissions rate projects. The policy change specifically indicates that energy storage systems will also come under the new system as part of the ITC.
This new curveball means that from 2025, storage assets will no longer qualify for these specific benefits. This seemingly minute change could ripple out to cause significant problems for both residential and community solar companies. Moreover, it could lead to storage accessibility issues for those considering installing solar panels for their home.
These changes could also incur new administrative and contract costs for solar businesses, potentially reducing the consumer choice. As you know, one of the joys of a solar array for home use is the extensive list of options available. Anything that could limit this could be seen as a step backward.
The data shows that the Low-Income Communities Bonus Credit has done a lot of good, with the Department of Treasury receiving more than 50,000 applications since its introduction in 2023. These projects amounted to 1.5 GW of solar generation capacity, with 13% of solar arrays including energy storage in 2023. This figure is predicted to double by 2028, reflecting the growing interest in solar and energy storage solutions for homes.
So, what does this mean for you, as someone interested in solar? It means being aware of these changes, and engaging with your chosen solar company to understand how they may adjust their offerings in light of this shift. Further, it signifies the importance of staying updated on the industry trends and policies that directly impact solar accessibility and affordability.
Stay tuned for more updates and insights to stay ahead in your solar journey!
Original Articlehttps://pv-magazine-usa.com/2024/10/07/seia-ira-tax-changes-will-leave-energy-storage-in-the-cold/
