In a surprise victory for the solar and clean technology industries, Senator Joe Manchin and Democrats reached an agreement July 27th on a reconciliation bill, dubbed the Inflation Reduction Act of 2022. The bill includes $370 billion in spending for renewable energy and climate measures.

One of the most impactful provisions in the bill, which can be read in full text here, is the long-term extension of the Investment Tax Credit, which has been instrumental in launching the solar industry we know today. The bill calls for a 10-year extension at 30% of the cost of the installed equipment, which will then step down to 26% in 2033 and 22% in 2034.

The tax credit applies to individuals, businesses, and utility-scale developers of solar technology. The 30% credit also applies to energy storage whether it is co-located or installed as standalone energy storage. This enables the retrofit of a battery to a solar array while taking advantage of the credit.

“With long-term incentives for clean energy deployment and manufacturing, the solar and storage industry is ready to create hundreds of thousands of new jobs and get to work building out the next era of American energy leadership. This is a crucial window of opportunity that we cannot miss, and now Congress must seal the deal and pass this legislation,” said Abigail Ross Hopper, president of the Solar Energy Industries Association.

The bill is expected to head to the Senate floor for a vote as early as next week.

Solar investment tax credit to be extended 10 years at 30% – pv magazine USA (pv-magazine-usa.com)

Statement from Vote Solar