The Inflation Reduction Act of 2022
The Inflation Reduction Act of 2022 is the largest investment in the fight against climate change in United States history and can have significant positive impacts on your business. Core Development Group can help your business to maximize the benefits of this legislation, which will drive the U.S. towards a new renewable energy era.
The Inflation Reduction Act provides major investments in domestic energy production and manufacturing and is anticipated to reduce carbon emissions by roughly 40 percent by 2030. The Act includes numerous energy security and climate change investments, including investments in climate protection, domestic energy generation, and tax credits aimed at reducing carbon emissions. Most notable for Core Development Group’s commercial customers, the new legislation extends the solar investment tax credit (ITC) for 10 years and offers enhanced levels of credit which will add significant value to solar projects.
“Our industry recognizes the importance of The Inflation Reduction Act and the impact it will have on the growth of the domestic clean energy market to propel businesses and communities toward a cleaner and more resilient future,” said Core Development Group CEO Henry Cortes. “With the passage of the Inflation Reduction Act, the energy transition to domestic and clean energy independence will accelerate significantly, improving our economy and our environment.”
Core Development Group recognizes the challenges organizations face daily to make large clean energy projects fundable and profitable. Solar, storage, and EV charging can help reduce federal tax, lower energy spending, and earn passive income for organizations. The Inflation Reduction Act provides incentives that can be monetized to make clean energy projects not just attractive but also irresistible, as a means to satisfy ESG goals and invest wisely at the same time.
The IRA has some key higher tax credits, including the following for solar projects: investment tax credit increases from 26 to 30 percent; an additional 10 percent ITC for projects with certain domestic content minimums; and an additional 10 percent investment tax credit available in qualified energy communities, e.g., brownfields or former coal areas, or 20 percent for low-income areas.
In short, some qualifying projects could receive up to an additional 50 percent investment tax credit – which holds for storage projects as well. Moreover, the investment tax credits have a “direct pay” provision that allows tax exempt entities to receive direct payment of the tax credits.
The Inflation Reduction Act is going to have wide-reaching effects on solar and storage projects, and Core Development Group will help organizations to understand the ins and outs of this historic climate initiative and maximize its benefits in the near term and long term. It’s an exciting time to be working in the solar space and Core Development Group welcomes the energy the new legislation brings to the industry.
“It represents an unprecedented tailwind for both renewable energy and electric vehicles,” Cortes said. “This legislation will help transition businesses and organizations to a better bottom line with clean energy projects that drive our country towards a cleaner and brighter tomorrow.”
To learn more about how the IRA may impact the economics of a commercial solar project, please provide your contact information here.