Last month, President Biden passed a bill known as H.R. 5376 – Inflation Reduction Act of 2022. The bill covers multiple topics, including healthcare, corporate taxes, staging at the IRS, and solar energy related legislation.
The Inflation Reduction Act will decrease consumer energy costs, increase energy security, and help reduce greenhouse gas emissions. The combined investments in the Budget Reconciliation bill will reduce an estimated 40% emissions and represent the biggest climate investment in history.
Benefits of the Inflation Reduction Act
There is a wide variety of factors that are causing price hikes in energy costs. These range from leftover effects of the pandemic, to the invasion of Ukraine. Both of those events have had massive effects on the global supply chain. Not to mention the progression of climate change has caused more extreme weather events and creates higher demand, and will likely drive energy prices even higher.
The Inflation Reduction Act will lower prescription drug costs, health care costs, and energy costs. It is the most progressive action on battling the climate crisis in American history. In turn, it will help lift up workers and create fair union jobs across the country.
Additionally, it will lower the deficit and request rich individuals and corporations pay their fair share. No one making under $400,000 per year will pay more in taxes.
How the Inflation Reduction Act will Save You Money
Residential Clean Energy Credit will subtract 30% of the cost of installing solar heating, electricity generation, and other solar products from federal taxes. The credit will be available to taxpayers for more than a decade, which means homeowners have plenty of time to consider their solar installation options.
From now until 2032, if you install solar equipment on your house, you are eligible to be compensated 30% of the total amount. Whether that’s $10,000 or $100,000, you will receive a nonrefundable credit to apply to your federal icon taxes.
According to the Department of Energy the following solar equipment will be covered by the new bill:
- Solar photovoltaic (PV) panels.
- PV cells used to power an attic fan (but not the fan itself).
- Contractor labor for onsite preparation, assembly, or original installation.
- Permitting fees, inspection costs, and developer fees.
- All equipment needed to get the solar system running, including wiring, inverters, and mounting equipment.
- Storage batteries. (You can claim the tax credit for these even if you buy and install them a year or more after you install the solar system.)
- Sales taxes on eligible expenses.
With this bill, you will save money on electricity bills. Your savings will depend on how much electricity your household uses, the size of your solar system and the amount of sunlight it gets, and local electricity rates. Additionally, a purchased solar system will also raise the value of your house if/when you choose to sell it.
“There’s no question in my mind that all these incentives will make the difference for consumers on the fence about solar, accelerating access to the technology for Americans across the country,” said Suzanne Leta, senior director and head of policy and strategy at residential solar company SunPower Corp. “Especially those that are low to moderate income.”
Start Your Switch To Solar Today
If you are looking for the best solar company in Kansas City, look no further than KC Solar. They are your local Kansas City solar panel installation experts. Once you schedule a no-pressure site visit, our experts will help you understand what solar system specifications would be best for your home or business.
KC Solar is the only local solar company in Kansas City with KC natives who own and operate the daily activities of the business. What does that mean for you? We care about you because we care about this city, and we only want the best for it.
And be sure to download our Free Solar Panel Buying Guide for more information.
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